Application service provider: What is it?

Definition

An application service provider (ASP) is a business that delivers software applications or services over the internet or a network to its customers.

What is an application service provider?

Instead of users installing and maintaining software on their individual devices or servers, ASPs host and manage these applications centrally, providing access to users through web browsers or dedicated interfaces.

Users can access the hosted applications over the internet, usually through web browsers or dedicated client software. This allows for remote access and collaboration, making it convenient for users regardless of their location.

ASPs often operate on a subscription or pay-as-you-go model, where users pay for the services they use rather than making upfront software purchases. This can be cost-effective for businesses as it eliminates the need for significant initial investments.

ASPs offer scalable solutions, allowing users to easily scale up or down based on their needs. This is particularly beneficial for businesses experiencing growth or changes in demand.

Application service provider vs. software as a service

An application service provider (ASP) delivers software applications and related services over the internet, hosting the software on its own servers and providing access to clients for a subscription fee. Software as a service (SaaS), on the other hand, is a broader category where software applications are hosted by a third-party provider and made available to customers over the internet.

While ASPs typically offer more customisation and control over the software, SaaS solutions are designed to be more scalable, with updates and maintenance handled by the provider. Both models want to reduce the need for in-house IT infrastructure.

Example of an application service provider

Common examples of services offered by ASPs include customer relationship management (CRM) software, enterprise resource planning (ERP) systems, email services, and collaboration tools.