January/February 2001

• Allied Business Intelligence Says Wireless Internet Will Drive Speech Rec
• Study from Pyramid Research Shows Service Revenues Growth
• Cahners Report Says U.S. Employees Will Utilize ASP Services
• Online Customer Service Importance Highlighted In Datamonitor Study
• Dataquest Says Hosting Market To Grow To $9.3 Billion By 2004
• Multi-Public Unit (MPU) Market Rising To Meet Connectivity Demands
• Convergence To Drive In-Building Wireless Market
• IDC Says USinternetworking's Latest Funding Round Validates ASP Model

Allied Business Intelligence Says Wireless Internet Will Drive Speech Rec
A study from Allied Business Intelligence predicts there will be nearly four million fixed voice portal users in North America in 2001, with that figure rising to 17 million users by 2005. The group predicts that mobile voice portal users will jump from about one million users in 2001 to more than 56 million users by the end of 2005, driven by industry standards like VoiceXML and Speech Objects. The study contends that the growth of the Internet for wireline and wireless users will play a role in driving the voice recognition systems market.

Study from Pyramid Research Shows Service Revenues Growth
Pyramid Research predicts international Internet service revenues will grow from $80 billion (US) in 1999 to $290 billion by 2004. The study also predicts growth to $77 billion in Western Europe during that period, with the strongest growth projected for applications, hosting, and Internet access throughout the continent. The report forecasts less growth in sectors like backbone and transport and network access during that period.

Cahners Report Says U.S. Employees Will Utilize ASP Services
A report from Cahners In-Stat Group entitled, "Entering the Broadband Era" forecasts that 40 to 55 percent of U.S. employees will use an online computing service from an ASP by 2003. The report predicts that these services, enabled by carriers as a key channel for delivering application services, could grow to a nearly $7 billion market by 2004.

Online Customer Service Importance Highlighted In Datamonitor Study
In 1999, online businesses in the US lost more than $6.1 billion in potential e-commerce sales because of a lack of customer service on their Web sites, according to Datamonitor. The study predicts that poor service levels could contribute to a loss of more than $63 billion in potential revenues by 2004 if companies don't correct this problem.

Dataquest Says Hosting Market To Grow To $9.3 Billion By 2004
The U.S. hosting market will reach $2.8 billion by 2000, and the worldwide market will reach $9.3 billion in 2004 according to a study from Dataquest, a unit of Gartner Group. The hosting segment will also account for 13 percent of a $69.2 billion management services market in 2004, compared to 1999, when it accounted for six percent of a $34.5 billion management services market. Dataquest analysts contend that the wholesale services market is driven by ASPs who want to focus on core application management competencies by partnering with hosting services, while the retail segment is driven by demand among enterprise end users for scalable bandwidth, and computing and storage capacity for new and legacy application management.

Multi-Public Unit (MPU) Market Rising To Meet Connectivity Demands
Cahners In-Stat Group says the demand for mobile connectivity through wireless access technology has risen, and predicts that MPU services and equipment market will jump from its current value of $848,000 to $1.2 billion by 2004. The group also predicts wireless LANs will be the most prevalent public broadband access method, and says most systems are currently being deployed in airport and hotel areas.

Convergence To Drive In-Building Wireless Market
The Phillips Group-InfoTech reports that revenue from in-building wireless installments will soar from $161 million in 1999 to more than $817 million by 2004 - driven by converged voice and data technologies. These solutions will capture 50 percent of in-building wireless handset shipments in 2004, compared to 42 percent in 1999.

IDC Says USinternetworking's Latest Funding Round Validates ASP Model
IDC senior analyst Amy Mizoras says USinternetworking's announcement of commitments for more than $300 million in funding is a victory for the industry. "It really validated the ASP model in general, " she said.

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