An investigation into the value proposition of application hosting
Faculty of Business and Public Management
School of Business
The Australian newspaper as recently as August 5, 2003 contained a headline that '…ASPs time is nigh'. The Application Service Provision (ASP) phenomenon has been heralded as the 'next best thing' for the past four years but has yet to materialise. The rapid obsolescence of IT, the increasing availability of broadband and the desire of software vendors to have a long-term relationship with customers would seem to make the ASP proposition the most attractive option for all of the participants of the supply and use of application software. Many investigations have taken place into why the ASP model has failed most of which have focused on the end-user. This paper critically examines the ASP value chain and proposes a major flaw in the cost/value proposition that is precluding the adoption of the ASP model.