The failure of many ASPs has created opportunities for their competitors, much like the death of elderly tenants in rent-stabilized New York City buildings once created opportunities for apartment seekers. Aggressive apartment hunters would scroll through the death notices to spot vacancies and rush over to the buildings of the deceased to grease the palms of the superintendents for those prized, low-cost apartments.
Now, ASPs, especially smaller ones, read the Web sites that track the financial troubles of their competitors and use that information to solicit new customers. This is how Andrew Garcia, director of sales and marketing at OfficeTool.com, got early word about the trouble at Red Gorilla, whose Web site it subsequently took over.
Garcia says he still visits various business sites on the Web to find out which other ASPs are laying off staff and struggling for survival. “We could contact others if there were synergies there,” he says.
Susan LeWinter, co-founder and VP of business development at WebEmporium, sees another benefit from other ASPs closing down—getting easy access to their customers. “You can get in the door and reach the CIOs of their clients. And your calls get returned,” she says.
Finally, the demise of ASPs is also helping to limit the number of new players vying for market share. “For a while, ISVs [Internet service vendors] like PeopleSoft wanted to become ASPs, as well,” says Bruce Graham, COO of ASP Interliant. “Now, its not the hottest idea.”