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Lotus gears up for hot ASP market

In a move to broaden revenue sources, the IBM subsidiary announces a new application service provider strategy and appoints a new executive to head the service.

2 min read
CAMBRIDGE, MASS.--Lotus Development today announced a new application service provider strategy, a new executive to head the service, and a revised pricing model as the company looks to broaden revenue sources.

The IBM subsidiary was an early player in the hosted application market, releasing its hosted groupware application Instant Teamroom in 1997. Today, the company unveiled the Lotus ASP Solution Pack, a package of software applications that will allow application service providers (ASPs) to maintain independent copies of the same application for several companies securely on one server.

ASPs host software so customers do not have to install and manage it themselves. The software is accessed from desktops and is remotely monitored from a data center. Customers pay outside providers to run everything from complicated enterprise software installations to more common desktop applications, which are often difficult to maintain.

By using the ASP Solution Pack, independent software companies and ASPs can host and develop applications on Lotus Domino or IBM WebSphere servers. All offerings require the Domino Server, the company said.

The software now available in the ASP Solution Pack include a groupware application, real-time collaboration software, and Web mail and calendar programs.

"We're not looking to blanket the world" with a family of new products, said Ken Bisconti, vice president of worldwide product marketing. "We want to provide a breadth of solutions that are targeted at specific needs in the market."

Lotus also unveiled a new pricing model designed for the ASP market. Unlike the existing software licensing model, the hosting licensing model asks ASPs to pay a $10,000 minimum commitment of Lotus usage fees in the form of electronically delivered monthly hosting units (MHUs). With this purchase, ASPs are licensed to install as many of the ASP Solution Pack servers and applications as are needed to support their customer bases.

The company named Oliver Chou as vice president of ASP strategy.

Lotus chief executive Al Zolar said he expects the ASP market to be a major part of the company's business.

"We see ourselves going from what is a minuscule part of our revenue now to what will represent the majority of our revenue in the future," he said. "It is our intention to grow with this market or faster."

Market research group Gartner predicts the worldwide ASP market will reach more than $25.3 billion by 2004. In 1999, Gartner analysts said the ASP market was worth $1 billion and would reach $3.6 billion by the end of 2000.