Application Server Providers are becoming a viable means of outsourcing for many companies and their information technology needs.

Webopedia defines ASPs as, “Application Service Providers are third-party entities that manage and distribute software-based services and solutions to customers across a wide area network from a central data center.”

As a third-party entity, ASPs allow companies to outsource many of their application needs, thereby, eliminating the need for internal deployment of software and network support systems. Because ASPs manage and distribute software from a central site, upgrades, preventative maintenance and troubleshooting is performed in one place. Companies find this aspect of ASPs very appealing and beneficial.

Typical applications hosted at ASPs are made available to clients through a browser-based interface, such Internet Explorer 5 or Netscape 4. Though client software may need to be installed, ASPs have the capability to package it within a basic browser download or auto-install upon access.

Some of the most popular applications being hosted by Application Service Providers are:
· Human Resource applications for payroll and accounting
· Sales automation applications
· Office productivity tools
· Enterprise Resource Planning applications

The immergence of these applications among ASPs have stemmed from the needs of small businesses that are unable to afford to pay the amount of money required to acquire full-featured ERP applications. Acquiring the use of these applications through ASPs is similar to renting the applications, making it affordable for even small businesses.

Though ASPs have been available for years, the astronomical use of the Internet and the introduction of high-speed networking solutions have made the use of ASPs more viable. There are currently more than 100 ASPs offering their services or top-tier ISPs (Internet Service Provider), ISVs (Independent Software Vendor) and NSPs (Network Service Provider) announcing their plans to offer these services in the near future. Microsoft, for example, has announced their plan to offer application services.

For many ISPs, adding an ASP service is essentially the next step. Because ISPs have already built a vast customer base, the offering of applications as an value-added service would generate present and future customer appeal. ISPs view the opportunity for customers to use expensive applications, which they might be reluctant to purchase, highly beneficial to customers and as a means to keep them coming back. However, for ISPs to move into the ASP space, ISPs will need to form partnerships. One way ISPs are finding partners is by using an ASP partner locator. Through a locator, they are able to find Application Service Providers that offer applications based on the type of service the ISP wishes to host.

Application Service Providers are growing stronger everyday. Providers of all types (ISPs, ISVs and NSPs) are looking to them to enhance their business strategies. While, businesses are looking to them as a means of outsourcing and cost-effectiveness. Don’t be surprised if one day your company or Internet Service Provider offers ASP services to you.