What is an ASP?

An Application Service Provider (ASP) is a business that offers software services to customers, using the Internet as the means to deliver and manage the service. Software offered using an ASP model is also sometimes called On-demand software or software as a service (SaaS). The goal of an ASP business is to reduce the cost of software distribution and maintenance.

The need for ASPs has evolved from the increasing costs of specialized software that have far exceeded the price range of small to medium sized businesses and organizations. As well, the growing complexities of software have led to huge costs in distributing the software to end-users. Through ASPs, the complexities and costs of such software can be cut down. In addition, the issues of upgrading have been eliminated from the customer's organization by placing the responsibility on the ASP for maintain up-to-date services, 24 x 7 website availability, and physical and electronic security..

The ASP model can be extremely appealing to businesses and organizations, especially small businesses and startups, because it can drastically lower the costs of software and services and minimize the maintenance requirements for the organization.

Common features associated with ASPs include:

ASP provides software that suits a specific common need.
ASP fully owns and operates the software application .
ASP owns, operates and maintains the servers that support the software.
ASP makes information available to customers via the Internet.

The advantages of an ASP include:

Low cost of entry.
Extremely short setup time.
Software costs for the application and enhancements are spread over a number of clients.
The pay-as-you-go model is often significantly less expensive than alternatives.
The ASP model, as with any outsourcing arrangement, eliminates head count. IT headcount tends to be very expensive and very specialized.
Redeploying IT staff and tools to focus on strategic technology projects that impact the enterprise's bottom line.
The ASP model also eliminates specialized IT infrastructure for the application as well as supporting applications.
Reduction of internal IT costs to a predictable monthly fee.
Key software systems are kept up to date, available, and managed for performance by experts.
The ASP model can shift Internet bandwidth to the ASP, who can often provide it at lower cost.
Improved reliability, availability, scalability and security.
Access to product and technology experts dedicated to available products.

Some disadvantages include:

The client must accept the application as provided since ASPs can only afford customizations that benefit many clients, or for large clients willing to pay for custom modifications.
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.
Integration with the client's non-ASP systems may be problematic

The bottom line is that ServeAnt is able to provide the features commonly needed for member based organizations and small businesses through a website product using an ASP model. This results in significant cost savings, and on-going feature enhancements are automatically included.

Sources:
About.com
HowStuffWorks.com
Wikipedia.org
Tech-FAQ.com