Hype or not, business sense ultimately rules. The ball is thus in thevendor's court to prove they can be trusted and can provide credibleservices. "They have to come out with credible, trustable offerings:on a small scale, by vendors who are known in their vertical markets;at the other end of the scale, to have a mass market brand name," saysGartner's Jester.

Make IT Work

Anytime that you are dealing with a relatively new market as the ASPand MSP, it is difficult to be sure what service you end up getting.To protect yourself, you should first look at your vendor's financialstability and if possible, have a backup strategy in place. "You needto understand who owns the intellectual property of the software andthe data, and where it is backed up. What happens to the data if thecompany is acquired by someone else? All these need to be built intothe evaluation and business case," says Jester.

It is also important to ask for references. There is no betterindicator of how an MSP will handle your business than how it handlesothers. "If we have not worked with the vendor before, they shouldcome recommended by some of our counterparts," says James Ng, managerof Business Strategy Department, Logistics Service Division, SonyLogistics Singapore.

Observers of the ASP and MSP market like Jester predict a hugeshakeout over the next year. For one, more players will come in.Gartner predicts big, brand name players will enter and offerapplications to small- and medium-sized companies, or verticalmarkets.