L'application service provider è un provider che fornisce una connessione al cliente con il proprio data-center. Tale connessione permette al cliente di utilizzare attraverso la rete su cui viaggia tale connessione applicativi informatici.

I vantaggi sostanziali di un tale tipo di servizio si ritrovano in un risparmio di costi da parte del cliente che dovrà pagare esclusivamente la connessione ai server dell'erogatore del servizio, mentre il pagamento delle licenze dei programmi ed i costi di manutenzione dell'hardware spettano a quest'ultimo. In questo modo il cliente può memorizzare i propri dati di elaborazione sulle strutture fisiche del fornitore.

Gli applicativi più diffusi in questo tipo di servizio sono gli ERP, iCRM, gli applicativi di e-commerce, di e-procurement, di data warehousing, di business intelligence e, in taluni casi, applicativi per l'automazione di ufficio.

The ASP model

The application software resides on the vendor's system and is accessed by users through a web browser using HTML or by special purpose client software provided by the vendor. Custom client software can also interface to these systems through XML APIs. These APIs can also be used where integration with in-house systems is required.

Common features associated with ASPs include:

• ASP fully owns and operates the software application(s)
• ASP owns, operates and maintains the servers that support the software
• ASP makes information available to customers via the Internet or a "thin client"
• ASP bills on a "per-use" basis or on a monthly/annual fee

The advantages to this approach include:

• Software integration issues are eliminated from the client site
• Software costs for the application are spread over a number of clients
• Vendors can build more application experience than the in-house staff
• Key software systems are kept up to date, available, and managed for performance by experts
• Improved reliability, availability, scalability and security of internal IT systems
• A provider's service level agreement guarantees a certain level of service
• Access to product and technology experts dedicated to available products
• Reduction of internal IT costs to a predictable monthly fee.
• Redeploying IT staff and tools to focus on strategic technology projects that impact the enterprise's bottom line

Some inherent disadvantages include:

• The client must generally accept the application as provided since ASPs can only afford a customized solution for the largest clients
• The client may rely on the provider to provide a critical business function, thus limiting their control of that function and instead relying on the provider
• Changes in the ASP market may result in changes in the type or level of service available to clients