In a newly published study, IDC noted that 2001 was a turning year for ASPs. In the coming year, the ASP must focus
Shift from concept to revenue, down-to-earth, and strive to be a survivor of this fast-moving but unpredictable market. And for the capital market, should
How to weigh the weight of the ASP company?
Difficult situation
According to IDC forecasts, the ASP market 2001 sales of only 600 million U.S. dollars, is forecast last year's 6 billion dollar annual sales of 1/10.
At the end of October 2000, usinternetworking (USi) had only 60 million dollars of cash left on its books; at one point, the share price slipped to 1 in excess of $73 per share.
Digital. With a 50 million dollar loan from GE Capital, and 270 million of billions of dollars in private financing from companies such as Microsoft, Usi survived, but it was
The experience of death is the common symptom of the whole ASP industry.
Commentators predict that at the end of 2001, the ASP market will reach more than 6 billion U.S. dollars, under the incentive of this forecast, more than 500 ASP companies to get 10 billion dollars in risk investment
Chinese. It turned out that the reviewers were greatly mistaken. Many potential customers are scared off because of concerns about the security of company secrets and Internet reliability. With
, the ASP's money began to run out to pay for the huge cost of building data centers and obtaining package authorization. Pandesic and Red Gorilla, stopped in the last 6 months
Closed the business, dumped more than 100 unlucky customers.
According to IDC, the ASP market could barely reach $600 million trillion in 2001, less than 1% of its information technology spending, which is far from enough to feed the competition
Actors Gartner, a market-research firm, expects 60% of its ASP companies to collapse next year.
Real Future
In the 4th quarter of last year, venture capitalists injected 1 billion of dollars into a new generation of ASP companies. IDC estimated that 2004 ASP market sales will reach 7.3 billion U.S. dollars.
The source of the ASP's funding appears to have dried up, but it is still circulating. This is because the first generation of some leading companies-including USI unified the action, and the new
Generation of ASP is being born. These new entrants, including the accounting firm Netledger, have completely recreated the software running on the web, rather than from the existing
Software company procurement software package. In the 4 quarter last year, venture capitalists injected 1 billion dollars into the new generation of companies. Executive partner Rich Shapero said: "This is
The real future of software. "
USi 23-month share price (as of March 2001)
ASP companies must sell enough packages per quarter to meet Wall Street's expected value. Software is sold as a service and revenue should be more predictable. and
When the new technology matures, it can be instantly integrated into the software and delivered to the customer. IDC estimates that sales in 2004 will reach $7.3 billion trillion.
Criss-Cross Competition
The new generation of ASP's economies of scale can produce more than 90% of gross profit margins, compared with the traditional software vendors, which is 70%, and early ASP as 15%~20%.
VeriSign is a company that provides cryptographic services for E-commerce sites and corporate communications. Last year, it had a financial income of $475 million trillion, up from a year earlier
460%. The expected net income could reach 45.5 million dollars.
VeriSign kicked off the fierce competition this year. In order to achieve a small but steady stream of gains in the short term, the early ASP will fight to the desperate, while
A new generation of companies has squeezed into the market. Software giants like Oracle also want to take part in the action.
Some first-generation pioneers now seem to be on the right track. USI gather 170 customers, and last year's revenue rose 208% to $110 million trillion. Commentators expect
Year's income is around 165 million dollars, breakeven points in the 3 quarter or 4 quarters. The best news is that USI has completed a huge data center costing more than $300 million trillion.
Construction work. The other company that walked in front of it was Corio, which earned 43.6 million dollars last year and grew by 650% per cent. Commentators expect revenue of 75 million this year
The dollar will be profitable early next year.
However, no matter how good the adjustment, the first generation of ASP on the new stage will undergo a difficult period. A new generation of ASP companies to build a very reliable web site
Point, all customers connect to this site and enter their own information in the template. It does not have to buy a server for each customer like the first generation company. If you are
Often, a new generation of ASP's economies of scale produce more than 90% of gross profit margins-far superior to the average 70% of traditional software vendors and the 15%~20% profits of earlier ASP
Rate.
The Power of the Giants
In 2000, Intuit's online services revenue amounted to more than 20% per cent of total revenues; The number of clients who use Oracle online has doubled; Microsoft bets the future
On. Net.
The biggest challenge for the new ASP company is to recruit big customers. But that is already beginning to change. Employease.com is an Atlanta human resources suit.
Company, its average customer size increased from 96 to 441 in 2000.
Software giants are becoming the force that new ASP companies need to deal with seriously. Intuit, a company that supplies financial and tax software for small businesses and consumers, is an open
A 1 billion-dollar company that earns more than 20% of its revenue from online services. Intuit every package, from QuickBooks Accounting program to Torbotax
Tax procedures, there is a corresponding network version.
While Intuit has grabbed ahead of its peers, other major software vendors have vowed to outperform it in providing software services. Heavy-weight software companies such as SAP,
Oracle and PeopleSoft, in terms of profitability, have a significant advantage over the first generation of ASPs. They don't need to buy other people's software-they develop it themselves. Over the past year
, the number of clients online using Oracle's financial, manufacturing, and customer service applications has doubled to 100. In early February, SAP said it had started selling directly to customers
Service.
Microsoft treats this market slightly differently. Although it offers its office desktop applications to customers through a very small number of managed services, its primary goal is to
Companies and ASP companies provide a software platform on which to build services-what is called. NET technology. Last fall, Microsoft invested 50 million of USI in the U.S.
Part of the yuan, the new company agreed to provide customers with Microsoft's technology based services. But Microsoft has met strong competition from sun and Oracle, and the two
Division also provides basic technology for network services.
