ASP...two steps forward, one step back.(problems of applications service providers)(Statistical Data Included)(Industry Overview)

In ancient Egypt, an asp was a snake with a poisonous bite. Today, an ASP is an applications service provider, a renter of software or services delivered via the Internet to companies for a monthly fee.

These ASPs aren't poisonous -- they never bite -- but they do run into problems and they can go out of business, leaving clients in limbo.

HotOffice.com, a Boca Raton-based ASP firm that offered virtual office software, simply ran out of money before its ASP customers and income stream could reach the point where profitability starts. Those customers/clients suddenly had to fend for themselves when the firm closed in December.

HotOffice's critics say offerings weren't vertically focused or exclusive enough, and that the firm was charging for some things that were already free in the marketplace.

Nationally, marchFIRST (Nasdaq: MRCH), a consolidator in the Internet consulting field with some fingers in the ASP pie, saw its stock dive from a high of $81 a share to less than $2 this year.

It recently raised $150 million in additional capital, giving up a third of itself to get it.

MarchFIRST's problems stem from its rapid acquisition program, rather than something inherently …