Application service provider

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Application service provider

An application service provider (ASP) enables businesses to outsource all or part of their information technology (IT) requirements. Any company that hosts computers and provides IT services is an ASP.

ASP Business Models

There are three ASP business models. Some ASPs focus on one model, while others offer different models to customers.

Dedicated model

The dedicated model is similar to traditional outsourcing, in which an ASP provides dedicated hardware to run an application, typically an enterprise resource planning (ERP) application. The ASP offers a guaranteed level of service and availability. The ASP manages both application content and hardware/software infrastructure.

Colocation services model

The colocation services model is a real estate play. Hands-on customers generally want colocation hosting. Customers purchase data center space, Internet connectivity, and server monitoring, but they own and operate the equipment inside the center. This model often makes sense for large corporations with some information technology (IT) expertise, as well as dot-com companies whose entire business is on the Internet.

Shared hosting model

In the shared hosting model, the ASP provides bandwidth, hardware, and software services to support applications that multiple companies share on a virtual host.

ASP Services

Generally any service that a company’s information technology (IT) department supports can be outsourced to an ASP. Some of those services are listed below.

  • Sales and customer support
  • Accounting and finance
  • Planning and supply chain
    • Procurement
    • ERP
  • Productivity
    • Project management
  • Human resources
    • Payroll
    • Corporate travel
    • Benefits
  • Vertical markets
    • Technology
    • Publishing
    • Health care