NEW YORK -- Panelists from a variety of different points of view in the ASP market huddled together at Internet World Wednesday to discuss changing customer needs and a host of possible solutions to help revitalize their beleaguered industry.

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"What we've experienced, lately, is a slowdown in customer business processes. They are [displaying] a bit more caution than we've seen over the last year," said Matt Covert, vice president of North American operations, for Triangle Group of Companies. "Customers are getting more creative in stretching the scope of their offering. Managers are trying to kill two birds with one stone as far as problems across their business."

Triangle Group of Companies, based in the United Kingdom, serves up business management services targeted toward government and environmental markets. Covert's comments were echoed repeatedly by his panel counterparts as they indicated a heightened sense of urgency among their customers to justify cost structures by dropping cost analysis measures in favor of quantifiable ROI) outlined by the ASP.

"The economy has been on everyone's mind. Companies have leveled off on spending," said Eric Yu, CTO of New York-based Centerprise, an independent software vendor-turned ASP that offers Oracle-based professional services solutions for financial services firms using the software license and service delivery model.

Yu said ASP customers are becoming savvy enough to not only understand but demand that proper risk mitigation, control, and process management features be included in mutual SLA (service-level agreement) arrangements.

Morris Panner, CEO of Boston-based OpenAir, said his company wrestles with daily concerns including load testing and availability, security, and its relationship to SLA performance. To prove its mettle, OpenAir gives users a quantifiable "before and after" ROI scenario which it must live by should the customer sign on.

"In some ways, subjecting yourself to scrutiny has been shunned by the software industry," Panner said. "But because we say to our customers every month, 'we will prove this to you,' some of them could say, 'you have to prove it every day.'"

Additionaly, ASPs must not underestimate the daily interaction, labor, and infrastructure headaches involved with establishing partnerships, said Paula Hunter, chief marketing officer at Xevo and president of the ASP Consortium.

"You'll run yourself into the ground by saying 'Yes' to everyone," Hunter said. Xevo is an infrastructure provider to ASPs, service providers, and the management service provider market. Hunter said ASPs can expect a slow climb toward growth over 2002, but added, "the good news is there's nowhere to go but up."