Colt Telecom is making a major move into the fragmented ASP market in partnership with Hewlett-Packard, but it may face and obstacles in the form of an 'inflexible' Microsoft.The two companies are to roll-out managed Windows 2000 hosting in eight major European cities including Berlin, London, Madrid, Milan and Zurich. Alex Kirstetter, internet communications manager at Colt, said: "This is the first stepping stone of a range. It will provide a basis, first for the financial sector which our research indicates is a prime candidate for this model - especially for messaging applications." Tony Lock, senior analyst at Bloor Research, said: "It has always been a chicken and egg situation and most ASPs haven't really taken off. What it has needed was some big guys, like a telco and Hewlett-Packard, to offer the reliability and reliance and what the customer wants to get it going. "But the software companies need to change their charging - they are not taking into account the rental model." Colt's Kirstetter added: "It is awkward. There are four main W2000 packages. Microsoft makes them very expensive and they are inflexible to deal with. We have found it difficult to get a licensing agreement. "We have found that most customers want to break through the Microsoft system categories - they don't want to use the systems in the way that Microsoft prescribes." And Lock pointed out that the ASP model would not take off until there were 'customers using it in anger'. He said: "It's the best way to sell, possibly the only way to sell for the ASP model now."