Although analysts have long predicted that telcos would have to become ASPs, it seems that carriers wait-and-see approach may have been smart after all. Yesterday, Cable & Wireless announced that it is folding its a-Services division. That leaves only one telco – Qwest Communications International – with an ASP arm.
C&W made the decision to shutter a-Services because there is not enough demand from small- and mid-sized enterprises for hosted application services, says C&W a-Services President Jeremy Thompson. "For our product offering, which was shared hosting, a multi-tenant service, there was delayed interest in the marketplace," he says. "While there was some interest, it was not at the rate that we would liked to have seen."
C&W hasnt decided what it will do with the a-Services business. It could sell the assets, including the Web interface it developed, Thompson says. The division employs about 60 people. Some of them may be reassigned, but others may be laid off. The fate of a-Services, its employees and customers will be decided by years end, Thompson says. He would not be specific about how many customers are affected.
Thompson was quick to point out that a-Services demise does not mean that C&W has given up on the applications-outsourcing model. "We still believe fervently in software as a service," he says. "Its just that we got to market too quickly."