Unisys finds ASP market sluggish

By ADAM GIFFORD

Unisys is revising its strategy for renting applications over the internet after finding the market slow to embrace the application service provider (ASP) model.

ASP services general manager Sean McDonald said a survey sent this month to 1022 businesses confirmed some assumptions and challenged others.

"As we half expected, the market doesn't understand what ASP is about and what its value is, so it's not able to articulate what applications it would look to have provided through ASP," he said.

The survey was done over the internet with the e-validates survey tool.

Of the 143 businesses that responded, fewer than a third claimed detailed knowledge of ASP, although more than half said they had some knowledge.

The main applications they were interested in taking over the internet were customer relationship management, e-commerce, e-mail or messaging, surveys and payroll-HR (human resources).

"We were very surprised at those results," Mr McDonald said. "Some applications we thought would be strong, such as project management, the market said 'no'."

Other applications which sparked little interest were Microsoft desktop applications, enterprise resource planning and decision support.

The survey also asked businesses what they would be prepared to pay to rent applications.

About 44 per cent said they would rent a CRM application for less than $10 a user a month, 32 per cent said they would pay up to $50 and 12 per cent said they would pay up to $100.

Similarly, a reasonable number of businesses were prepared to rent e-commerce applications for more than $50 a month.

But almost no companies were willing to pay more than $50 a month for Microsoft Office, and most were willing to pay only $10 or less.

While Unisys is not offering the program, eSolutions, the consortium of Telecom, Microsoft and EDS (Electronic Data Services), rents out Office at $185 a user a month.

A licensed copy out of a box costs users at least $30 a month, as well as hardware, network maintenance and support costs.

"That really spelt out some truths about the applications we currently have and how they are priced and why there is some resistance," Mr McDonald said.

But the results indicated people were not taking the soft costs into account - that they saw the cost of software as the price on the box, and failed to include hardware, networking, security, data protection and backup, hiring and keeping the staff needed to run their systems, and the cost of money needed to buy systems rather than rent them.





Mr McDonald said that in the four months since Unisys ASP Services was launched, take-up had been slow.

Most interest had been from very small businesses looking for CRM and e-commerce software, and large companies who wanted Unisys to host highly customised applications.



He said seven customers were deploying the New Zealand-made Orderware e-commerce software, which allows companies to create a buying and selling website.

Nine companies had signed up for the Splashnet and WebWorks CRM software from Stayinfront, and one small and three large companies were taking the Great Plains suite of business software.