Application Service Provider

Q: What is an Application Service Provider?  

Application Service Provider

An Application Service Provider (ASP) is a software vendor that rents software to companies over the internet instead of selling it. Traditional software programs are copied onto compact discs/cd-roms, and then sold to consumers who load these programs on their hard drives or file servers. Application Service Providers, on the other hand, keep the software on the hard drives of their own file servers, and customers pay a fee to use the software over the Internet.

There are many cost savings in moving toward this type of service, also known as Software As Service (SAS). One of the prime motivators is that the cost of deployment is minimized, as is training. Maintenance costs are also eliminated. Many traditional software vendors are now offering SAS and ASP services, even Microsoft is in transition to joining the ranks of application service providers.


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