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What is an "ASP"?

An Application Service Provider (ASP) is a company that creates a subscription based software service. For a fee (usually monthly or yearly) the ASP provides secure access to critical operations and management software over the Internet. All the end user needs is an Internet connection and browser to access their work, anywhere at any time. Client organizations rely on the ASP to host the application, maintain the software, administer the information system, revise the application, and provide end-user support.

There are several ways that ASPs out-perform traditional software:

  1. Speed
    ASPs are able to react quickly to customer needs, so upgrades can be implemented as and when they are needed - and provided to all users of the service at once. 'Bugs' can be fixed on the fly, as soon as they are discovered, with the fix applied universally.

    Traditional software development processes are slow and cumbersome compared to ASP technology, often taking months or years between 'versions'. Software feature upgrades and 'bug fixes' are developed, packaged and sold as new versions of the original application, usually for a hefty upgrade price. These new versions often destabilize the existing application, requiring more 'bug fixes'.

  2. Reduced costs
    Customers who subscribe to ASP services take advantage of reduced costs in several areas. They do not have to purchase, install, maintain or upgrade dedicated servers. They do not have to buy upgrades or patches to their application, as traditional software users do, and they do not have to hire expensive IT staff to maintain and trouble shoot either hardware or software.

    ASP providers maintain robust, state-of-the art servers, and employ IT experts to maintain them. Any costs related to hardware and software maintenance or upgrades are borne by the ASP.

    ASP users are able to capitalize on some unexpected cost savings, too. Without the need for dedicated in-house servers or IT staff, space requirements are reduced and budgets can be reassigned.

  3. Improved Customer Service
    Because ASPs often rely on monthly subscriptions, they are incredibly focused on customer satisfaction. Software manufacturers are used to a different sales model – they build a product and sell it – once – to their customer. They've got their money up front, and are less concerned about keeping their customer happy over time.

    An ASP must 'win' each customer every month – answering questions and trouble-shooting - building and maintaining a lasting relationship.

  4. Security
    ASPs are able to provide higher levels of availability, security, backup, and disaster recovery because they have more robust systems and more specialized, knowledgeable IT staff.

    In-house IT staff must deal with software conflicts, bugs and incompatibilities as well as hardware issues. Backups, security and regular maintenance often take a back seat to trouble shooting. Over time, an in-house system can become riddled with quick-fixes, patches and make-dos that can seriously threaten the functionality and security of both hardware and software.

  5. 24/7 Access
    Access to an ASP application is available anytime, anywhere in the world, with any computer that has Internet access. This open access is ideal for companies with offices in different cities, those that outsource project components to contractual employees, or those with unorthodox hours of operation. Information is accessible at home, in the office, on the road.

    Traditional software vendors, in order to make money, must sell multiple copies of their application or multiple licenses to it, and control access to it very carefully. In most offices the software is available only in one specific location – even one specific machine.

    When companies choose ASPs over traditional software-based applications, they are making a sound business decision to reduce costs, increase security and access, and focus their manpower, budgets and energies on their core business strengths.

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