Definition
An application service provider is a company that offers software services online. It eliminates the need to install or control the software on your devices.
History of Application Service Providers
- Before the 1990s: Users were required to install the most software applications on their computers or servers. Companies had to invest significant resources to develop hardware and software, leading to high costs.
- Late 1990s to early 2000s: The internet enabled businesses to access software remotely through web browsers. ASP hosted software applications on their servers and rented access to businesses, eliminating the need for them to buy, install, and maintain the software in-house.
- From the 2000s to 2010s: The tremendous internet improvement increased broadband accessibility. Businesses started to embrace storing data off-site and outsourcing IT needs. ASPs are advanced and developed, with some companies specializing in specific niches like e-commerce, ERP, or CRM. Software-as-a-Service (SaaS)also emerged, similar to the ASP but focusing on internet-native apps, scalability, and multi-tenancy.
- From the late 2010s to the present: The growing popularity of cloud platforms such as Google Cloud, Azure, and AWS has caused a breakdown in the link between ASP and cloud services. Modern software platforms employ cloud infrastructure to boost performance and agility.
Application Service Provider Uses Cases
- E-commerce services: They include Payment processing, shopping carts, and online storefronts.
- Content management systems (CMS): Blogs and websites.
- Financial services: These include wealth management services, online banking, and other financial systems.
- Business applications: They include ERPs (enterprise resource planning systems), CRM (Customer relationship management), and HRM (human resource management).
- Communication tools: Video conferencing, email, and other collaboration tools.
- Learning management systems (LMS): Courses and online training.
- Healthcare: Telehealth services, appointment scheduling, and medical record structures.
How Do Application Service Providers Work?
An application service provider’s business is to host and manage software applications. Clients can access these applications on the Internet through subscription models. This removes the need for the clients to install and maintain the software, enabling them to focus on their core operations and leaving ASP to handle technical aspects.
Types of Application Service Providers
- Enterprise application service providers: These providers offer diverse, high-end business apps to their clients, such as Enterprise Content Management (ECM), Enterprise Resource Planning (ERP) systems, Customer Relationship Management (CRM), and other cutting-edge solutions.
- Regional/local application service providers: These providers deliver services within a certain geographical location. They serve local businesses by providing apps tailored to the distinctive demands and regulations of the region.
- Specialist application service providers: Such providers offer specialized or niche applications. This can range from healthcare apps to educational software, based on the specific industry requirements.
- Volume business application service providers: These providers mainly deal with general business applications, such as emailing services, office suites, or other popular business tools.