An ASP system, or application service provider system, is software that provides computer-based services to various customers by way of a network. Basically, the ASP vendor houses the software and allows users to access the software. This approach allows for users to use a software, which can be rather expensive, without having to actually buy it. Users generally use the software through a standard protocol (like HTTP) or by separate software provided by the ASP.
ASP systems have become very popular, especially for smaller businesses for whom expensive specialized software would be cost prohibitive. ASP system customers vary greatly and include individuals, private businesses, and public organizations. Medical billing services, payment processing services like PayPal, and timesheet services like SlimTimer are all examples of ASP systems.
There are various categories of ASP systems depending on how many solutions are provided by the ASP. Some ASPs only focus on one application such as credit card payments. Other ASPs provide a suite of applications to meet the customers various needs. For example, some ASPs provide all the special software necessary to run a private medical practice (e.g., patient billing, employee payroll, patient scheduling software).
Usually the ASP owns, operates and is responsible for maintaining the software it makes available to its customers. And, more often than not, ASPs are accessed via the internet rather than through its own special software.
There are many advantages to adopting the ASP system approach. The primary one being the cost savings it affords by spreading that cost among many customers. Also, by using outside software, inside IT expertise is not necessary.
As with many things, although there are many advantages to the ASP system, there are also some disadvantages. One of the disadvantages is that the software generally comes as is. Customized solutions are generally only made available to the largest of clients. Furthermore, changes in the ASP system can result in changes in the type of service available to clients.