Blog Past: The Coming Age of ASPs
It is now called Software-as-a-Service and the more fashionable Cloud Computing. Back then, we called it Application Service Provider. I wrote this series in May 2005:
Even as globally ASPs are making a comeback and software-as-a-service seems likely to define at least a part of the industry, in emerging markets, the opportunity for both SMEs in Emerging Markets (SMEEMs) and the ASPs is significant. This is because of the lack of legacy infrastructure – enterprises have simply not invested adequately in IT over the past decade because of issues like affordability (dollar-denominated pricing), desirability (lack of relevant applications) and manageability (not enough skills to manage technology). Now, with the ASP model, all of this can change. As businesses realise that they have to automate for growth, software vendors have an opportunity to fulfill this market need.
In fact, I believe that from the perspective of emerging markets, the ASP model of software-as-a-service is a disruptive innovation. The competition, for the most part, is non-consumption, as SMEEMs use only limited software for their business. The need in these markets is for ASPs and SME Tech Utilities. ASPs build the back-end and SME Tech Utilities provide the whole solution to the customer (thin clients, LAN-Grid, broadband connectivity, and perhaps, consulting to ensure that they can make appropriate use of the software).
One way to accelerate the process would be to build Tech 7-11s in business neighbourhoods. These multi-purpose Tech 7-11s can be the last mile bridge between the ASPs and the SMEEMs. In emerging markets, businesses will need greater hand-holding as they automate their businesses – and this is where the Tech 7-11s can play a starring role. In addition, their physical presence will also reassure customers wary of dealing with faceless service providers.