Once upon a time, when computers were so expensive that not all companies could afford them, most of the processing was performed by specialized firms that rented computer time and services. Some of these organizations have a long history of providing such services; for instance, ADP. The development of Internet and Web-based applications has offered these firms a new infrastructure to offer their services. These companies are known as Applications Services Providers (ASPs). ASPs provide mainly software applications for the basic business functions of a company: human resources, accounting or customer relations, but there are also some organizations targeting the software development domain.
ASP Tools for Software Development - The Current Market Trend (Page 2 of 5 )
There are many different views on the current trend for the ASP market. Here are how some vendors that are or have been active in the ASP market see it, sorted in ascending order of positive view.
"Hosted solutions will continue to struggle because they are hard to sell and administer," -Simon Galbraith, Red Gate Software
"Most companies prefer to run the software themselves as there are security concerns that they are worried about. A big problem we have is that we are not an established brand, and some people have problems with trusting the intellectual property with us. Therefore the uptake on hosted solutions is a lot less." -Andrew Thomas, Inobyte Ltd
"It seems to be the case that there are legitimate reasons to want either solution. Given that the different needs are driven more by overall IT strategy (more control with in-house solutions, more flexibility and less maintenance with hosted ones) rather than by specific technologies, it seems likely this separation will continue. Non-browser-based applications, by comparison, must either come to use the Internet in the same way that browser-based applications do or die out because of their disadvantages in terms of collaboration and availability. -Luc Reid, Vermont Software Testing Group
"For a variety of reasons, some companies still prefer to implement in-house solutions. Over the past few years, we have seen a steady increase in new customers who are looking for a short-term hosted solution which can be implemented while they continue their evaluation of in-house enterprise-wide solutions" -Krishen Kota, AdminiTrack.com
"On a wide scale, hosted software is continually gaining traction. However, there are companies for which it makes sense for them to host their own software. It is generally a balance between the business case and the comfort level of the IT department. Very often, a happy medium can be worked out. " -Mark Phillips, Standpipe Studios, L.L.C.
"There has been an interesting uptick in client signups with the service over the past 3 quarters. I am currently attributing this spike in activity to the many technical people who have been out of work for 6-12 months. Instead of finding new jobs with established companies, I believe that they are now starting up their own software companies. This effect has been especially noticeable in the United States, where the economy has been depressed for the past 2-3 years. As new start-ups, these small companies can ill afford to spend the time and money necessary to maintain their own source code control system. SourceHosting.Net fits their budget, so I believe we will help a large number of these early-stage start-ups during the initial product development phase. Even after that initial phase is complete, our clients typically stay with us because of the cost savings compared to hosting a source code repository internally and dedicating time and resources to maintaining it." -Greg Larkin, SourceHosting.Net
"At first, we expected only smaller companies and start-ups to use the ExtraView hosted solution rather that the in-house solution. We assumed that teams with smaller budgets would be inclined to use a pay-as-you-go plan in order to preserve cash flow. However, we found that it was the larger companies that preferred to cut server, database and maintenance costs and go with a secure hosted solution. Larger companies understood that their data is more secure on our collocation servers and were comfortable with our hosted security, reliability, and availability." -Michael Stebbins, Sesame.com
"At the present time IT community is shifting dramatically toward hosted solutions. As Internet infrastructure will grow further, this process will accelerate." -Val Karmazin, eBUGtrack.com
As you can see the answers differ considerably. This difference can also be attributed to the types of services offered by the ASP. I think that two current trends can favorably influence the ASP market for software development tools:
The growing importance of geographically dispersed teams and collaboration between different organization's. As the Internet becomes the place to share information and tools, hosted solutions provide the advantage of neutrality.
The benefit seen by management in ready-to-use short-term solutions.
ASP solutions could be readily usable and their monthly fees allow a precise management of direct costs.