Signs Of LifeSigns Of Life

Is there life left in the ASP market yet? Application service provider USinternetworking last week said it completed its merger with Interpath Communications and signed a group of new contracts. Both companies are backed by investment firm Bain Capital.

USi says it has signed new hosting contracts with L'Oreal USA, Sunburst Hospitality, Sunoco, and others. It also said it would begin hosting customers' payroll-processing software.

One year ago, USi filed for Chapter 11 bankruptcy protection. In May, Bain invested $81 million in USi and said it would merge it with Interpath, in which Bain owns a controlling interest.

IDC forecasts growth in the outsourcing market as companies slice costs and ASP services sales of $21.8 billion in 2006, up from $11.1 billion in 2001.