X marks the SP spot for IBM

IBM Corp. on Thursday announced a re-branding and broading of its ASP Prime Program to include a larger array of service providers.

The new program, xSP Prime, makes IBM the first company to catch a wave ready to wash over the IT industry, according to an IDC Canada Ltd. analyst.

“They are riding the wave at the beginning of the wave,” said Lise Dellazizzo, Canadian ISP manager for IDC Canada, whose American parent IDC coined the term xSP. “They’re trying to touch every area of that xSP world.”

Pat Falatico, vice president of North American sales for IBM’s NetGeneration unit, said xSP Prime will reach new customers and better define their offerings to service providers outside the ASP realm.

“There is a piece of it that is re-branding because we were doing these things with other service providers before,” she said. “(And) there would be companies that say, ‘I’m not an ASP but I do provide managed services to end customers.'”

xSP Prime extends ASP Prime’s model – offering the business and technical support to help ASPs and software developers deploy their services in a Web-hosted model – to other service providers like storage service providers (SSPs), systems infrastructure service providers (SISPs) and Web hosters.

“It’s a very smart strategy, I think,” Dellazizzo said of IBM re-branding ASP Prime to xSP Prime. “They’re casting the net a little wider.”

What is especially new about xSP Prime, Falatico said, is its business design and technical strategy workshops for service providers. The former includes a financial modeling tool, which calculates “what if” scenarios from business variables and settles on business and technology objectives.

The “x” in xSP is a variable that can stand for virtually anything. IDC defines xSPs as any service offerings that are: delivered over a network; externally managed, disseminated from one to many; service-fee based.

IDC predicts the xSP market will reach US$460 billion worldwide by 2005. While Canada-specific xSP data is not yet available, promising predictions for the ASP market in this country suggest a positive outlook for xSPs in Canada.

Dellazizzo predicts 90 per cent compound annual growth rate for ASP spending over the next five years. According to a report she authored earlier this year, ASP spending will hit $145 million this year and grow to $455 million by 2004. On Thursday Dellazizzo said she now thinks the predictions for 2002 were on the conservative side.

She said a maturing ASP market in Canada is starting to attract American companies, promising increased competition to the benefit of the consumer.

“Last year they had their hands full because they had a boom,” she said of stateside ASPs. “They’re going to start taking notice because we’re rolling out.”

Last week, at an IBM ASP information seminar, Marylin Beaton, a business development executive with the company’s NetGeneration unit said lower costs in Canada provide American ASPs with “big opportunities” to set up shop here and sell their services back to Americans at a greater profit.

“It’s a logical assumption,” Dellazizzo said. “If you came in here, your IT expenses are less expensive. And you’re looking at getting space cheap in state of the art data centres.”

She did say, however, that U.S. companies might face cross-border issues in coming north and selling back to the home market.

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Jim Love, Chief Content Officer, IT World Canada

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