Impact of Vendor Capabilities on ASP Performance

Outsourcing has emerged as a key method of managing Information Technology and Systems (ITS) in the current era, though facilities management, a form of outsourcing, has existed since the 1970s. The growth of outsourcing as an ITS governance mechanism has dramatically increased during the 1990s by tens of billions of dollars annually. Part of this current growth may come from new kinds of outsourcing services such as Application Service Providers (ASPs). An ASP is defined as "a company that offers rentable applications to multiple business users from a shared data center over the Internet, an ATM, frame relay or a private-line network”(Network World Sept 27, 1999). Dataquest estimates that the worldwide ASP market will grow to $25 billion by year-end 2005.