Despite the hype surrounding the Application Service Provider (ASP) market, it will only be worth $150 million this year, although this figure is expected grow to between $4 billion to $5 billion by 2003.
And despite what the vendors say as they try to evangelise the market, users are not yet demanding ASP services and are confused about what it all means, although they are interested in the concept, according to Clare Gillan, IDC's vice president of applications and information access research at the firm's Systems Market Outlook conference in Redwood City this week.
"The ASP market is primarily a vendor driven opportunity. They're trying to build the market, but users are currently at the confusion stage of the cycle, which will be followed by scepticism and then acceptance. There's a myth that these vendors have thousands of ASP customers today already, but in reality, most of them only have about 20 customers each," she said.
However, she added, a recent survey indicated that 37 per cent of US companies would consider this model if suppliers could guarantee reliability, satisfactory customer service, security and scaleability - which was the biggest benefit offered by the ASP model.
And if these criteria could be met, as many as 10 per cent said they might move to an ASP, she said.
She continued that although ASP services were being targeted primarily at small businesses, interest did not seem to be based on company size. Many of the dot com companies were looking at it as a proposition, particularly in the financial services and healthcare sectors and also in some branches of manufacturing.
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