May/June 2001

BY LAURA GUEVIN

Well, needless to say, more than 500 companies answered our call for applications, covering a broad space ranging from enhanced services like unified communications and click-to-call customer service buttons to billing and application development platforms -- to network infrastructure and broadband providers. And the companies ranged in size from well-known global operations like Cisco and Motorola, to hardworking newer companies like two-year-olds Centrinity and Pagoo.

Many of the failed dotcoms offered much hype but little in the way of value (although their IPO parties featured great values with free food, alcohol, and entertainment). It is the nature of a good ASP to use minimal equipment and investment to offer a maximum level of services, and load balancing and network management tools ensure that not only are customer service levels met, but that the ASPs are getting the best performance out of the hardware and bandwidth they use.

Enterprises are beginning to wake up to the benefits of hosted services as they examine their budgets and the limitations of their staffs -- even the government estimates it will outsource much of its IT staff over the next few years. And demand for vertical hosted applications like communications is steadily rising. The ASP market is indeed maturing, and as a result, enterprises can choose from a more flexible selection of services, not necessarily a broad replacement for their existing IT resources. Today's ASPs can evaluate the burdens and challenges placed on a current IT department and step up to fill in the gaps, freeing in-house personnel to focus on their core competencies.

I thought I had a good grasp on the types of companies in the hosted communications space several months ago, when I created the categories vendors could use to identify themselves on our Buyer's Guide application form. But the market changes so quickly that there are a multitude of additional entrants, as evidenced by the large "Other" category at the end of the Product/Service Listings in the Guide. Companies define their offerings as Application Provisioning Software, Accounting/Remote Services ASP, Knowledge Management, Bluetooth Services, Communications Mediation Service Development...the list goes on.

But what about the changes the telecommunications market is undergoing? Voice and data carriers are merging left and right, and behemoth-sized companies are beginning to be the order of the day. Competition is fierce, and only the strong will survive. Enhanced services can and will make a difference, both in differentiating the innovators from the masses and providing a value-add to the customer and potential partner.

A Look At The Landscape
The trend for companies over the past year or so has been to merge or partner so that they may offer a complete set of services from one strong vantage point. Just look at what is happening in the RBOC space, where SBC Communications has merged with Southern New England Telephone (SNET), PacTel, and Ameritech; Qwest has bought out US West; and Bell Atlantic and GTE have merged to form Verizon. Then of course there's the AOL-Time Warner merger, which brings cable infrastructure into the picture.

The new FCC lineup led by Republican Michael Powell is putting less emphasis on regulation and more emphasis on encouraging competition. Where does that leave the market for competitive local exchange carriers (CLECs)? To survive, they must offer truly innovative services and back up their offerings with airtight service level agreements. It's the only differentiator for a smaller player, and only the strong CLECs will survive, at least according to a study by The Strategis Group, which estimates tomorrow's CLECS will be a small group of large, strong companies.

From whatever angle you happen to be looking at the telco/service provider landscape, it's apparent that services, and the ability to deliver them efficiently and quickly, will play a huge role in the lifespan of voice carriers. And if the diversity of the companies listed in this Buyer's Guide isn't proof of that, then I don't know what is. We hope the guide will be an overview of the major players in this space, and an introduction to the possibilities that exist for hosted communications services.

[ Return To The May/June 2001 Table Of Contents ]