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

See also
 Application server
 Business service provider
 Communication as a service
 Hosted service provider
 Multitenancy
 Outsourcing
 Service level agreement
 Utility computing
 Web application

References

External links 
 

IT service management
Customer relationship management