Sometimes Internet hype resembles the mad scramble of the Gold Rush; sometimes it's more like the knights of "Monty Python and the Holy Grail" yelling, "Run away! Run away!" Right now, the dot-bomb shakeout is in full swing, and perhaps no Web vendors are feeling more heat than application service providers.
An ASP, as you probably know, lets customers subscribe to a service instead of buying conventional software. Rather than having to install, maintain, and upgrade applications, you and your employees use a browser interface to access programs and data on the ASP's remote servers, whether at your desk or on the road, telecommuting from home or standing at an airport kiosk.
Last summer, the market analysts at Gartner Group predicted that 60 percent of today's ASPs would be dead by 2002. Red Herring has joked that ASP stands for "awful stock pick," and an IDC research officer expects use of the acronym to disappear altogether ("Vendors no longer want to be associated with this decimated sector").
Just since December, Day-Timers Inc. closed its Day-Timer Digital site; Interact Commerce Corp. abandoned its ambitious plan to link its Act contact manager to a 40-function ASP site at interact.com; the Desktop.com suite died; ThinkFree Office dropped its free suite and hiked the price of its paid subscription; and the pioneering online intranet HotOffice.com collapsed (even as Home Office Computing was naming it one of last year's 100 best).
If you need any more clues as to which way the wind is blowing, just read the PR pitch I got last week on behalf of vJungle.com. The ASP talked not about its own impressive services but about how it's supplying XML-based tools to sites operated by the likes of Hewlett-Packard and the Small Business Administration. "Just as consumers typically trust Citibank more than Kozmo.com, vJungle is betting that small business owners will trust HP, Office Depot, and the SBA as they venture online. It's a win-win strategy that will be around long after many ASPs lay off their last 20-something."
In other words, vJungle is saying that customers will shun no-name or silly-name dot-coms like Red Gorilla, OhGolly, and, um, vJungle. I'm actually a fan of the company's services, along with those offered by NetLedger (which looks like a survivor, having established a strong lead in online accounting and an affiliation with Oracle) and Visto.com (which this week seems to have lost one of the two sponsors whose screens I'm used to seeing at signoff). Yet, I do agree.
Call it snobbery, but I feel better logging onto www.hp.com/sbso than www.vjungle.com, just as your customers will feel better writing to email@example.com instead of firstname.lastname@example.org, or visiting a site with your own domain name rather than one supplied by a free Web hosting service. That said, I've got vgeorge.vjungle.com, and I'm not giving it up.
Do you see a light at the end of the ASP tunnel? Share your outsourced Web-site experiences in the Small Business Memo thread in the online discussion area.