Nortel today announced a new application service provider (ASP) strategy focusing on SMEs demanding a speedy shift to ebusiness.
Nortel's managed application services initiative will see the network giant teaming up with HP and independent software vendors (ISVs) to bring a number of pre-integrated, certified network applications to service providers.
Durlacher Research predicts that the European ASP market will grow from $14 million at the end of 1999 to $1.5 billion by 2004. Durlacher's ASP analyst Richard Wendland said, "This is a conservative estimate. There will be fierce competition for the SME market. It represents the core market opportunity because of the sheer size that needs to be addressed."
The first three applications are managed messaging, managed ecommerce and managed workplace ecommerce, which are scheduled to be available in Q1 of next year. By next September, however, Nortel wants to incorporate high-end applications such as SAP and Baan applications into its offerings.
Paul Brandwood, marketing director of Nortel Network Internet Solutions, Europe, said: "There's a lot of hype surrounding ecommerce. SMEs have got the message but want practical solutions.""Our ASP strategy will make it possible for service providers to offer scaleable managed services to small businesses which are not well served by systems integrators, but represent 70 per cent of Europe's IT and telco spend from a business perspective," he added.
Durlacher's Wendland said: "Nortel has a unique selling point through its partners. As long as it executes to timetable, I can't see any reason why it will not assume an important role in supplying hosted commerce and messaging solutions to the SME marketplace."
Nortel's managed messaging application will use HP's smart Internet messaging suite and Software.com's Intermail to ensure scalability for email systems.
Nortel is working with Intershop, which provides ecommerce Web front applications, to improve SMEs' interactive customer service capabilities.
Workplace ecommerce provider, Concur, will add its ecommerce services to the package to help SMEs manage internal costs such as travel and expense management.
Some 200 people within Nortel Europe will be working on the ASP initiative.
Brandwood said that Nortel and HP are the perfect combination as Nortel addresses the service provider space and HP's professional services "can engage the enterprise customer."
He said that SMEs are not yet ready for more sophisticated Baan-style applications. "It's an education process. They're at the stage where they're seeing the benefits the Internet can bring," he said.
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