Indian ASP market poised for rapid growth

BANGALORE: India's fledgling market for application service providers (ASPs)

is expected to show robust growth in the next few years with many firms likely

to outsource their information technology needs, a study said.

"ASP revenues in India are expected to surge to about $43 million by

2004 from the estimated revenues of $2.89 million in 2001," consulting firm

Frost & Sullivan India Ltd said in a recent study.

ASPs rent application software from remote data centers to firms so that they

do not have to buy and own computing services.

Demand from small and medium enterprises in many sectors and from large firms

in the automotive and banking sectors will drive growth in India's ASP market,

Frost & Sullivan said.

"Up to 35 companies including Internet service providers, systems

integrators and independent software vendors are now market players in this

industry," the report said.

Many Indian companies formed joint ventures this year to provide application

services.

"The abundance of bandwidth being created by fiber-optic networks and

submarine cables will encourage companies of all sizes to ramp up their Internet

presence," Gaurav Dua, IT analyst at Frost & Sullivan, said in the

report.

The main ASPs in India include Internet firm Satyam Infoway and Computer

Associates, telecom and software firm Global Tele-System and Oracle India, HDFC

Bank and information technology firm i-flex Solutions.

"Many will hire Web-based applications from ASPs because this will save

them several million dollars and months of in-house development and

maintenance," Dua said.

A number of Indian private sector leaders and state-run giants are laying out

fiber optic cables across the country that will carry sound, pictures and text.

(C) Reuters Limited 2000.