What is Application Service Provider?

An application service provider is a third party technology services organization that provides users with software applications over a network, usually a local area network (LAN) or Internet. 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 an application software using HTTP protocol.

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.

ASP businesses can be categorized into five sub-categories. These are:

– Functional ASP: Delivers a single application, such as credit card payment processing or timesheet services

– Vertical ASP: Delivers a solution package for a specific customer type, such as a healthcare service

– Enterprise ASP: Delivers broad spectrum solutions

– Local ASP:  Delivers small business services within a limited area

– Volume Business ASPs: Delivers pre-packaged application services in volume at reasonable costs to small and medium businesses

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