Application Service Provider

Application Service Provider, aka, ASP, on-demand software or software as a service (Saas). Growing complexities and cost associated with maintaining specialized and complex software has given rise to specialized on-line services that provide businesses with cost effective solutions for a wide range of customer relationship management and marketing functions.

Through the use of ASPs, the complexities and costs of a variety of software applications can be reduced greatly. Along with the issues of maintaining upgrades, these services also provide technical support, physical and electronic security, and built-in business continuity.

Types of ASPs:

• Specialized or functional – provides a single application, such as credit card payment processing or payroll services;
• Vertical market – offers solution packages for a specific customer type, such as a realtor or real estate agency;
• Enterprise – delivers broad spectrum solutions; and
• Local – only works for businesses or organizations within a predefined and/ or regional area.

In all cases the ASP owns and operates the software application(s) and the servers where the software resides. Custom client software can also interface to these systems through XML APIs. These APIs can also be used where integration with in-house systems is required.

Advantages of utilizing ASPs include:

• Software integration issues are almost non-existent
• Software costs are shared by all users or  subscribers of the service
• Key software updates are managed by the service by the creators/experts
• Improved reliability, availability, scalability and security of internal IT systems
• A certain level of service is guaranteed
• Reduced and predictable IT costs