Vertical Markets Present Real Opportunities for ASP Vendors, IDC Research Shows
FRAMINGHAM, MA, April 29, 2002 – In 2001, services companies spent approximately $245 million on ASP services, more than any other market, a new study from IDC reveals. This research indicates that vertical industries will present key opportunities to ASP vendors. The healthcare sector will see accelerated growth rates and spending over the next two years as the deadline for compliance with the Health Insurance Portability and Accountability Act (HIPAA) draws near. Discrete manufacturers, despite a troubling year, spent $221 million on ASP services, making them the second-largest market for vendors.
IDC believes that one criterion for success in the ASP market is focus. Dozens of vendors entered the ASP space over the past few years, attempting to be everything to everyone and have found this approach to be expensive and ineffective. Today, many ASPs are realizing that a targeted effort is more effective than a gunshot explosion, particularly when budgets are being closely guarded.
‘Going vertical’ is a popular tactic today, as ASPs look for ways to increase the value they deliver to customers while making the most of their limited budgets, IDC’s research shows. Two vertically focused ASPs, Trizetto and Portera, have already seen relative success and IDC expects to see more vendors take this route in the near future.
"Focusing on a vertical industry is beneficial to both the customer and the ASP," said Jessica Goepfert, program manager for IDC’s ASP and Applications Management Services research. "By hon ing in on a particular industry or set of complementary industries, ASPs can better tackle end-user concerns around integration and customization. ASPs can leverage their knowledge of how businesses in a particular vertical market operate to pre-customize and configure their solutions, cutting down the time and expense of the implementations."
This bulletin, U.S. Application Service Provider Forecast, 2002-2006: A Vertical View, (IDC #26921) examines which vertical markets are expected to continue spending on ASP services over the next five years and looks at what the characteristics are for markets ripe for outsourcing. It also presents the U.S. ASP market by 18 vertical markets to help ASPs prioritize their sales efforts and develop their customer base.
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