ASP Competency Centre

Lim Swee Say, Acting Minister for Environment and Minister of State for Communications & Information Technology - Address, Launch of ASP Competency Centre, Conrad Hotel

Lim Swee Say, Acting Minister for Environment and Minister of State for Communications & Information Technology - Address
Launch of ASP Competency Centre, Conrad Hotel

Singapore, 16 July 2001

Mr. Lionel Lim, Vice President and Managing Director of SUN Microsystems, Asia South and Co-Chairman of ASP Centre
Prof Robert Gay, Director and CEO of ASP Centre
Ladies and gentlemen

1 I would like to congratulate the core sponsors of ASP Centre - NTU, SUN Microsystems, IDA; and all technology partners on the official launch of the ASP Centre.

2 The global economy is going through a cyclical downturn. Economies and corporations, big and small, all over the world, are affected to varying degrees.

3 As we go through this challenging period, it is important to recognise the structural effects of the cyclical downturn on our economy and businesses.

4 To better position ourselves for the upturn when it comes, we need to look ahead, re-invent and re-create new competitive edge in our economy, business enterprises and workforce.

5 We need to do so especially during this period of economic downturn because the competitive landscape will be different when the downturn is over.

6 In this regard, infocomm technology is a key tool for corporations of all sizes to re-invent themselves to remain relevant and competitive in the New Economy.

7 It can help develop new products, services, markets and channels. It can create new sources of revenues and new paths to sustainable growth and profitability.

8 However, the major problem faced by many business enterprises, in particular the SMEs, is their inability to keep up with the fast pace of technological advances.

9 As a result, many of them are unable to exploit the potential of infocomm technology to the fullest.

10 To overcome this problem, many corporations have decided to accord high priority to the building up of in-house expertise to manage and harness the potential of infocomm technology.

11 At the same time, a growing number of companies and organisations have also recognised that they do not have the critical mass of resources and expertise to build up the required competency within their organisations.

12 Hence, they look to outsourcing of the infocomm capability and application services as a more effective way for them to progress faster.

13 As a result, Application Service Provider (ASP) has become a growing business model because it can help to lower costs, reduce risks, speed up the pace of implementation, and keep up with changes in technology and business practices in the marketplace.

14 In short, it enables business enterprises, especially the SMEs, to enjoy the economies of scale.

15 In a market research conducted by Strategic Intelligence last month, it is estimated that the ASP market in Singapore could reach $250m this year.

16 It is also projected that the ASP market could grow into a $2 b market by 2004, accounting for about 12% of Singapore's total IT spending by then.

17 The projected growth of the ASP market in Singapore is a promising and encouraging sign. The competitive landscape in Asia and across the globe is changing fast.

18 To gear up for keener and stronger competition in a more responsive manner, companies can focus on their core business while upgrading their operations by 'Renting-an-Infocomm Solution' from the ASPs.

19 There is no need for hefty up-front investments because it can operate on a 'pay-as-you-use' model. This will reduce the financial burden on IT spending.

20 More importantly, the ASP approach also enables companies to take advantage of up-to-date software applications available in the market, and adapt to changes in business practices in a much more responsive manner.

21 The IDA is facilitating the growth of the ASP industry because of the benefits ASPs can bring to SMEs and even major business enterprises.

22 By working closely with complementary partners such as the Independent Software Vendors (ISVs), Systems Integrators (SIs), and Internet Data Centres (IDCs), the growth of ASP industry will add to the capability profile of the infocomm sector in Singapore.

23 This will enable the infocomm industry to not only serve the needs of the business community in Singapore better, but also the growing needs in the region.

24 To realise this tremendous growth potential, we need to tackle three immediate challenges facing the ASP industry players.

Building Confidence in the ASP model

25 First, as the market for ASP applications and services is still in its infancy, the ASP providers will need to build up the confidence of corporations and SMEs in adopting the ASP approach.

26 This involves demonstrating the benefits of the ASP model to potential users, communicating clearly the rights and obligations of the parties involved, and formalising the relationship through well-drafted Service Level Agreements.

27 Overtime, such best practices will add to the confidence in the ASP approach, and acceptance by the user community.

Injecting Innovation and Excellence in Service Quality

28 Second, ASPs will need to innovate and excel in service quality. They have to look ahead and build up new capabilities on next generation of ASP technologies, and develop new and innovative ASP services all the times to help create competitive edge for their users.

Exploring Cross-border Opportunities

29 Third, the ASPs need to support the operation of business enterprises beyond the local shores. The issues involved include resolving cross-border disputes, overcoming language barriers, and addressing inter-operability issues.

30 I learn that the ASP Alliance Chapter (AAC) in Singapore, together with ASP Industry Consortiums in Korea and Japan have recently established the Asian ASP Alliance to address some of these challenges. This will set the stage for greater cross-border collaboration with other ASP bodies in the region.

Creating strategic partnerships with key industry players

31 The setting up of this ASP Centre reflects the support and commitment being accorded to the development of ASP capability and growth of ASP market in Singapore.

32 It also reflects the close partnership between the IDA and the infocomm industry leaders in nurturing the ASP community here.

33 The Centre will nurture and incubate aspiring ASPs, from business concept to full scale deployment.It will help speed up the development of innovative applications and the delivery of quality services over the Internet for easy access by the SMEs, corporations and customers.

34 At the same time, the Centre will also help the ASPs to meet industry standards and service requirements. This will strengthen the role of Singapore as a leading ASP hub in the Asia Pacific.

35 On behalf of MCIT and IDA, I thank NTU, SUN Microsystems as well as all the technology partners for their support and partnership in the establishment of the ASP Centre at NTU. I wish the management and staff of ASP Centre every success in the years ahead. Thank you.