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Service providers to spend $1 billion on technology in 2000

A study suggests there is a huge opportunity this year for the networking firms and related computing companies that cater to the application service provider niche.

    A new study suggests there is a huge opportunity this year for the networking firms and related computing companies that can provide systems for the fast-growing application service provider niche. ASP middlemen try to simplify the market

    Applications service providers, or ASPs, are expected to spend nearly $1 billion on technology in the United States this year to build their businesses, according to market research firm Cahners In-Stat Group. And the likes of network equipment providers Cisco Systems and Sun Microsystems are expected to reap the benefits.

    An ASP lets a business access a software program across a network, rather than running that software on a local system. The theory goes that by outsourcing a company's software needs a business does not have to worry about the overhead costs--such as network and computer administration--associated with technology.

    Network equipment providers, which provide the high-speed connections that let an ASP send software across a network or the Internet, have jumped on this trend, hoping to reap a windfall.

    Other companies in line to gain a piece of the ASP technology market include Oracle, IBM and Microsoft, among others, according to the study released today.

    In-Stat's research also found that the number of ASPs in the market has grown from 70 last year to more than 100 by the first quarter of this year. Those ASPs say the primary issue facing them is building out their technology infrastructure so they can handle more business, the research firm found.