Application service provider
# Application service provider

An application service provider (ASP) is a business providing application software generally through the Web. ASPs that specialize in a particular application (such as a medical billing program) may be referred to as providing software as a service.

## The ASP model

The application software resides on the vendor's system and is accessed by users through a communication protocol. Alternatively, the vendor may provide special purpose client software. Client software may interface with these systems through an application programming interface.

ASP characteristics include:

* ASP hosts the application
* ASP owns, operates and maintains the servers that support the application
* ASP delivers the application to customers via the Internet or a thin client
* ASP may bill on a per-use basis (on-demand outsourcing), a monthly/annual fee, or a per-labor hour basis

The advantages to this approach include:

* Application costs are scaled over multiple customers
* ASP may provide more application experience than the customer's staff
* ASP may provide application customization for the customer
* Application's version is likely to be kept up to date
* Experts manage the application for performance
* Experts research the application for new features

The disadvantages include:

* The customer must rely on the ASP for a critical business function, including security and performance
* The customer may have to accept the application as provided
* The customer may have to adapt to possible application changes
* Integration with other applications may be problematic
