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What is an application service provider? An ASP is a man or a business that provides computer-based services to customers over a network. Software offered using an ASP model is also sometimes called On-demand software or software as a service. The most limited sense of this business is that of providing access to a particular application program using a standard protocol such as HTTP. The term ASP should not be confused with Microsoft Corporations software application.

The number of applications provided through the ASP model is growing. Accordingly, there is a growing business of companies developing software for that marketplace. What sorts of applications are being developed? As remotely-hosted applications can provide cost-effective access for businesses to unique software, many of the applications are designed to be of occasional use in terms of use. Others are geared towards using group connectivity provided by through the Internet to provide an application that is flexible.

There are a number of technical and business issues currently addressed by ASP’s to develop and enhance system applications. And a lot of companies creating software dedicated to various business functions as financial management, materials management, human resources and e-commerce transaction services. There’s a great number of solutions provided through this model.

A major advantage for businesses in seeking this kind of services is that they provide an opportunity to reduce costs and increase efficiencies. Companies can have access to a wider-range of software products with the possibility of paying less than an outright purchase through usage charges. Also it removes many of the technical and maintenance issues associated with software by providing real-time upgrades, remote hosting, remote dial in customer support and overall software management. This allows businesses to access applications that can service particular business needs so companies can focus on their core operations.

There are some hosting providers that offer a full set of infraestructure services for hosting online applications. They are called AIP’s (application infraestructure provider). They are pioneering a new way for mainframe web hosting applications.

The need for ASP’s has evolved from the increasing costs of specialized software that have far exceeded the price range of small to medium sized businesses. In effect, Application Service Providers provided companies with a means of outsourcing their information technology needs, allowing the companies to focus on their core competencies and allowing the ASP’s to handle key elements like web hosting, payments processing, etc. In this way, new technologies and the like are made available by experts who are bound to provide these under clearly defined service agreements.

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