The stock market is a great barometer of business confidence and buyer psychology. Viewed in that light, application service providers (ASPs) are alive and well, thank you.
Salesforce.com, an ASP that helps sales representatives track customers and prospective clients, went public on June 22, 2004, raising $110 million. Before the offering date, the initial public offering (IPO) was priced between $7.50 and $8.50 a share, according to the regulatory filings. However, interest was so great the stock went public on the New York Stock Exchange for $11 a share.
The good news continued. One day later, the stock closed at $17.20, a 56.4 percent rise. According to Thompson Financial, that was the biggest gain for an initial public offering so far this year.
Time will tell if the ASP model will prevail over traditional software licensing. Investors are betting it will.