New Twist In the ASP Market: Single-App Companies

The growing application service provider market is about to getmore crowded. During the next two weeks, three companies will launch: Intacct, MS2, and Mirronex. The newcomers, however, are a different breed, each offering single applications without customization or integration.

It remains to be seen whether the single-application approach will be viable. While it may be suitable for businesses that need just one application, most companies need more, and they may not want to deal with several vendors to get a complete ASP solution. "Ultimately, you're not going to want 27 different companies supplying, maintaining, and managing your applications over the Net," says Bill Martorelli, VP of E-services and sourcing for Hurwitz Group.

Customers could struggle with integrating outsourced applications unless single-application ASPs establish partnerships with other vendors and outsourcers, analysts say. Or, new middlemen may emerge to manage relationships between customers and the one-application ASPs, integrating hosted applications or internal systems for them.

Intacct, which will launch this week, plans to form partnerships. It's already considering a payroll-processing pact with Automatic Data Processing Inc. to bolster its Internet accounting software. Other single-application ASPs will go it alone, at least for now. Mirronex, which also debuts this week, will reveal the first customer for its MxConnect workflow-management software, the Limited Technology Services, a division of The Limited Inc. The Limited has been using the MxConnect application to improve response time from outside consulting and staffing firms.

Meanwhile, MS2, launching next week, will offer online project management. The software will let IT workers track project progress and collaborate on problems online, using a password and ID, for a flat monthly fee, depending on the number of users.