What is an Application Service Provider?

Application Service Providers deliver and manage applications and computer services from remote data centers to multiple users via the Internet or a private network. Obtaining these applications from an outside supplier is a cost-effective solution to the demands of systems ownership, implementation challenges, and a continuing need for maintenance, upgrades, support and customization.

Defining ASP Service Offering

ASPs provide a contractual service offering to their customers for deploying, hosting, managing and providing access to an application from a centrally managed facility. Several characteristics separate ASPs from other services including the following:

 Application-centric : The core value of the ASP service is providing access to and management of an application that is commercially available. This service is different from business process outsourcing where the outsourcing contract encompasses management of the entire business process such as Human Resources or finance. 

 Application access : Another value of the ASP service is that customers gain access to a new application environment without making investments in the application licenses, servers, staff and other resources. The ASP owns the software or has a contractual agreement with the software vendor to license it.

 Centrally managed : The application service is managed from a central location rather than at each customer’s site. Customers access applications remotely over the Internet or via leased lines.

 One-to-many service : The ASP service is designed to be a one-to-many offering. The ASP partners with other vendors to package standardized offerings that many companies will subscribe to over a specific contract period. 

 Delivery on the agreement : The ASP is responsible for delivering on the customer contract and seeing that the application service is provided as promised. If a problem arises, the ASP is responsible for closing the loop on the trouble ticket.