An Application Service Provider is a third-party entity that manages and distributes software-based services and solutions to customers across a wide area network from a central data center.
In essence, ASPs are a way for companies to outsource some or almost all aspects of their information technology needs. They may be commercial ventures that cater to customers, or not-for-profit or government organizations, providing service and support to end users.
ASPs are broken down into five subcategories:
- Enterprise ASPs — deliver high-end business applications.
- Local/Regional ASPs — supply wide variety of application services for smaller businesses in a local area.
- Specialist ASPs — provide applications for a specific need, such as Web site services or human resources.
- Vertical Market ASPs — provide support to a specific industry, such as health care.
- Volume Business ASPs — supply general small/medium-sized businesses with prepackaged application services in volume.
The differences between ASP and SaaS models are as follows:
ASP
- Single-tenant approach
- Customized solution for each user
- User has authority on the solution hosted by the vendor and can demand the type of service required.
- User data could be hosted at any jurisdiction per user’s requirement
- SLA is unique to user
- Cost is based on user’s unique needs
- Monthly subscription on an as-used basis
- Borrowed (third party) software used
- User has the luxury to pull out of the ASP, buy the software from a third party retailer and host it somewhere else
- Once signed up, the vendor may take long time to customize
- Each user requires customized training and orientation which makes its usability cumbersome
- Solution need not be internet based
SaaS
- Multi-tenant approach
- Same features and functionality to all users
- Solution is centrally managed, maintained and supported by provider. User is at the mercy of the provider and cannot demand any individual changes
- User data is hosted at a jurisdiction that the provider is comfortable
- Service Level Agreements (SLA) common to all
- Comparatively minimized cost than ASP
- Monthly subscription on an as-used basis
- Custom built software that is not available anywhere else is used
- User is unable to buy the software from a third party retailer and is limited to the SaaS vendor always
- Once signed up, the service is available immediately
- All users go through the same training and orientation making it easy to use
- Solution is always internet based.
