HOSTED applications providers are making their presence felt, particularly in the financial services sector, after several years struggling to carve out a niche.

In the pre-2000 dotcom glory days, applications service providers were expected to become a dominant force, but struggled to find customers.

However, ASPs are bouncing back this year.

Hosted applications providers such as Salesforce.com and Net Return say the lower cost and ubiquitous nature of broadband has underpinned strong growth this year.

Net Return director Stuart McLean says the financial services sector is an early adopter of hosted applications.

The business model used in financial services is well suited to ASP-delivered applications, McLean says.

Many finance houses – mortgage brokers or insurance brokers – operate a distributed network of either wholly owned subsidiaries or franchisees.

A distributed business structure makes it difficult, or at least expensive, to "get a single version of the truth", he says.

Some finance houses rely on fax machines and centrally re-keying data into a headquarters system to ensure they retain an accurate snapshot of regional offices and franchisee business, he says.

Net Return has been active in Australia since early this year as the sole local distributor of NetSuite, a US-based provider of customer relationship and enterprise resource planning software.

It snared its first large customer in Australia last month, when financial planner RetireInvest, part of the ING group, signed a licence for more than 100 seats.

McLean says the ASP model has only just secured a toe-hold in Australia but the model is set to dominate the small to medium company sector.

Net Return expects to have thousands of customers within the next three years and many thousands of seat licences, McLean says.

Meanwhile, Salesforce.com Asia-Pacific marketing vice-president Doug Farber says the financial services sector is one of the main early users of hosted applications.

Salesforce.com has done work for foreign exchange giant Travelex in Australia, as well as Genworth, the GE Mortgage Services spin-off.

Salesforce.com recently signed Baycorp Advantage and Citicorp, Farber says.

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