An application service provider (ASP) is the critical partner for a growing business using Internet-based solutions. ASPs host and deliver sophisticated business applications. Their clients can access these tools without the effort and expense required to build and maintain a technology infrastructure. These applications typically include customer relationship management, sales force automation, supply chain management or enterprise resource planning. Customers subscribe to an ASP and pay a monthly fee based on the number of users accessing the software. All applications and data reside at the ASP's remote data center. Delivery is via the Internet. All these functions are transparent. The client experience is the same as if the server were on site. The ASP functions as an outsourced information technology (IT) department and assumes all investments in technology and staff necessary to implement IT solutions. It operates and manages business applications and handles all maintenance and upgrades. Users experience the resulting productivity improvements while the ASP assumes the hassle.
A strong ASP partner benefits a growing business in many ways.
- Reduced cost of ownership: Licensing seats from an ASP gives the client access to the latest versions of powerful applications it would be pressed to purchase outright. There are no hardware, software, installation or other infrastructure costs. ASP contracts typically include automatic upgrades as part of the monthly fee.
- Predictable IT costs: An ASP contract shifts IT expenses from up-front capital cost to monthly operation overhead. Growing firms gain control over budgets and cash flow.
- Fast implementation: An ASP host implements business solutions rapidly in-house because it has the technology infrastructure already in place. Because access to the data requires only an Internet connection, a client company's remote locations can be up and running with the latest applications as quickly as headquarters.
- Reliability and security: An Asp's technology foundation is likely to be more reliable, flexible, and secure than most firms can create in-house. Asps commonly offer security, back up, disaster recovery, and support services.
- Payroll economy: ASP clients are not required to hire, train and retain skilled IT professionals. Internet-based companies can focus personnel resources on core competencies instead of hardware and software infrastructure.