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What is an ASP System?

By J.Gunsch
Updated May 16, 2024
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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.

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Discussion Comments
By Contentum — On Dec 13, 2013

I think the whole "asp" market is going to fade into the background as cloud based businesses are more out there in the public's eye.

By Contentum — On Dec 12, 2013

@Grinderry: what you speak of is mentioned in the second paragraph.

By Contentum — On Dec 12, 2013
Most asps have very sophisticated setups in their network closets, using high powered servers and other equipment to maintain and keep their software running.
By Grinderry — On Dec 11, 2013
Not all Asp's are based on the web. Some are just home grown entities that cater to their own industry. For instance, the guy who has a database of parts and numbers for his garage might be connected to a few other garages with different owners who find it more financially feasible to own and operate one central location that they can find their parts on without having to relay on some web-hosting provider.
By eoconnor — On Dec 10, 2013

I think that there might be a bit of overlap when it comes to ASPs in this era. As you mentioned the cloud is now the prevalent force driving a lot of businesses today, and the fact that most ASPs are more oriented around the web, as opposed to the cloud it may show that there is a point where the two technologies will perform or address the same task. Just as an observation.

By Realited — On Dec 10, 2013
With the advent of cloud computing most ASP's are now using more of a streamlined approach to their offerings. They want their customers to have access to their entire catalog usually through a web portal that points to some cloud centric location on the web. If there were ever a time to be involved with ASP's it would be now.
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