Updated: July 11, 2020 (August 28, 2000)

  Analyst Report

Microsoft’s ASP Strategy Takes Shape

My Atlas / Analyst Reports

3,734 wordsTime to read: 19 min

The exploding application service provider (ASP) market has become a critical competitive arena for Microsoft. Actively courted by IBM, Oracle, and Sun, ASPs are excellent prospects for many of Microsoft’s latest products, such as Windows 2000 Datacenter, Application Center Server, and Exchange 2000, which are the first Microsoft products with the scalability and reliability that ASPs require. But the ASP model is not the endgame for Microsoft: that market poses many uncertainties for the company. Instead, Microsoft wants to move the industry “beyond the ASP” to its .NET platform, built around Microsoft’s traditional strength on the client desktop and its growing strength in server operating systems and Web-savvy database and collaboration tools.

What ASP Means to Microsoft

The application hosting business, in its current incarnation, is based on renting applications to users. The ASP hosts the applications on its own (or rented) servers, and the interface to the applications is thin-client software—typically a Web browser—on the user’s machine. Little or no special software is installed on the user’s computer, and the application runs primarily on the server’s CPU and in the server’s memory space. The ASP model promises companies lower software management costs, the option to rent software they could not afford to purchase, and rapid deployment of applications to their users’ desktops.

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