Application Service Provisioning in SMEs: The Tough Job after the Hype

In the late 1990s the ASP (Application Service Provisioning) model was supposed to be the perfect solution for SMEs to reduce the cost and the risk of IT investments and to access high-quality services they could not otherwise afford. In Italy, where the vast majority of firms are small or medium sized, the ASPs market has up to now failed to attract customers, with erratic sales and no real “killer application”. Nevertheless, after the “irrational exuberance” of the late 90s, existing ASPs are slowly starting to increase their sales. The objective of this paper is to analyse the constraints on the growth of ASPs through empirical research, aimed at: • understanding demand-side problems, especially related to the existing investments in IT and to the inability of adopting new services without incurring a time-consuming learning process; • indicating relationships between the SME’s experience with IT and the likelihood to adopt ASP services; • pointing out elements that may help to understand the next phase of the evolution of ASPs. This research investigated a population of 438 manufacturing firms in the region around Turin, in Northwestern Italy, having between 50 and 1,000 employees