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Application Service Providers. Introduction. Application Service Provider or (ASP) has a significant placement in the business world. ASP provides customers with access to business application via Internet connection.

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  • Application Service Provider or (ASP) has a significant placement in the business world.

  • ASP provides customers with access to business application via Internet connection.

  • This has become more popular over the past few years and is still one of the most functional methods for IT outsourcing.


  • The ASP operates and maintains the equipment that run the application and also employs the people needed to maintain the application.

  • Most companies pay a monthly or yearly cost for the services.

  • For example, most of us pay for the use of an Internet Service Provider which gives us access to the Internet and e-mail. This is a prime example of an ASP.

Asps in the market
ASPs in the Market

  • Businesses of all sizes benefit from the use of ASPs for web hosting service and email.

  • Especially for small businesses and startups, the biggest advantage is low cost of entry and short setup time.

  • Plus the pay-as-you-go model is often significantly less expensive for all but the most frequent users of the service.

It roles and asp customer roles
IT roles and ASP customer Roles

  • It’s Typical Roles ASP Customer’s Roles

  • Plan Investments Specify application services needs

  • Build facilities Budget service costs and return on investment

  • Hire and train people Contract for services

  • Budget and track expenses Focus on your business, not IT

  • Select and procure systems

  • Select, procure, and test software

  • Work with vendors and providers

  • Hire integrators and consultants

  • Organize and define processes

  • Install systems and software

  • Develop software

  • Customize packages

  • Maintain systems and applications

  • Provide user support

  • Run the data center

  • Plan for the future

Advantages of asps
Advantages of ASPs

  • There are several advantages to using ASP’s. It will reduce their spending and the costs of keeping systems up.

  • ASPs also offer superior technical support which may be reason enough for most businesses.

  • All of this, for the most part, at a very low cost to the customer.

What vendor
What Vendor?

  • Major application vendors have focused both on the Business Process and Outbound and Inbound Logistics.

  • These applications are functionally stable, businesses believe they could afford the long development cycles.

  • Because they are expensive and mostly big, only wealthy business customers could afford them.

Examples of asps
Examples of ASPs

  • A Web hosting company - Companies like Verio and provide a classic ASP scenario -- virtual Web hosting. These companies provide hardware, software, bandwidth and people to host Web sites for companies and individuals. Typically, they charge something like $15 to $30 per month for the service, and may host hundreds of accounts on a single machine.

  • An e-mail provider - A Web hosting company usually provides some sort of e-mail service with your Web hosting account. There are two other alternatives:

    • Free services such as Hotmail or Yahoo! Mail

    • E-mail server ASPs who run exchange servers, POP servers or IMAP4 servers and distribute them on a monthly-fee basis - For example, a company in the Raleigh area called Inter-path offers a complete e-mail solution at a rate of $8 per month per account (as of 4/10/2000).

  • The advantage of the second approach is that the e-mail address uses your company's domain name.

  • A fax providerE-fax provides a free fax service that delivers faxes to your e-mail box. This is a classic example of a free ASP.

What to ask
What to Ask

  • How do customers access the software?

  • How are customer service issues resolved?

  • How secure is the data?.

  • How secure is the connection between the ASP and the user?

  • How is the application served?

  • How does the ASP handle redundancy?

  • How does the ASP handle hardware/software problems?

  • How does the ASP handle a disaster?

  • Who owns the data?

  • How can I get the data out if I choose to select a new ASP two years from now?

  • How can I move data between existing applications and the ASP?


  • The future of ASPs and their influence ,on anyone who is involved in IT and networking industries, is hard to envision.

  • However, there are going to be many interesting advancements to come with the industry and how it will be used and sold.


  • http://www.howstuffworks .com


  • Factor, Alexander. Analyzing Application Service Providers. 2002. Prentice Hall. Palo Alto.

  • Rowe, Stanford. Telecommunications for Managers. Fifth Edition. 2002. Prentice Hall. Uppers Saddle River.

  • Weiss, Peter. They Do More Than Just Save Money. Information Weekly. Nov 2001, Issue 862.