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An application service provider (ASP) is a vendor that provides individual users – or an entire enterprise – with software applications over a network, usually a local area network (LAN) or an LAN with internet access. The provided software may be referred to as software as a service, apps on tap, or on-demand software. One of the most basic forms of ASP is a vendor that provides access to a particular application software using HTTP protocol.
An ASP is an alternative to the repetitive and costly process of installing the same software application on many individual computers or network stations, and using local hard drive space to install those applications. An additional benefit is that software upgrades are often automatic, and the ASP often agrees to provide technical support and security for its software. With an adequately fast network connection, an ASP can support business continuity and flexible working hours.
Organizations that use ASPs include businesses, nonprofit and membership organizations and governments.
The ASP model has both advantages and disadvantages. In addition to the advantages described above, others include a service level agreement (SLA) that guarantees software usability and reliability, lower IT costs and the ability to redeploy IT staff to projects other than software updating and maintenance.
The disadvantages of ASPs include the inability to customize software applications (except for the largest clients). In addition, ASP changes may adversely change the service provided to a business’s clients. Finally, a business may have difficulty integrating ASP software with non-ASP software. Also, ASP control over corporate data and the corporate image may compromise corporate control and security.