Microsoft Builds Application Hosting Partnerships

Asked about Microsoft’s strategy for the burgeoning application service provider (ASP) market, Microsoft insiders are likely to respond with “what strategy?” That lack of direction confirms what a lot of Microsoft watchers have noticed, but it would be a serious mistake to assume that the company is doing nothing. Judging that the ASP market is more buzz than business at this time, Microsoft is in a learning and development phase, trying out various technologies and pricing models in an effort to position itself for the new world of “software as a service” and “Web-enabled applications.” Recent ASP investment activities follow this “let’s-see-what-works” approach.

The key problem for Microsoft is that its current products are not a good fit with the ASP model. Windows 2000 will change that, adhering more closely to Internet standards and offering greater reliability and scalability. This article reviews the nature of the ASP market, Microsoft’s current and future fit in that market, and the company’s chances of successfully meeting the challenges the ASP model presents.