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What is an ASP (Application Service Provider)? |
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Application Service Providers (ASPs) offer applications as a service.
That is, ASPs rent applications based upon a standard fee. This fee
includes hardware,
software, and the associated network infrastructure, support services, and
remote hosting. Customers access their applications using standard browsers
such as Microsoft's Internet Explore. Software-as-a-service is a new paradigm
in the application industry that offers substantial benefits.
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Advantages to ASP Model
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There are many business advantages to the ASP
model especially given the exponential rate of
change in information technology and the associated
shortfall in qualified IT personnel. ASPs allow
organizations to utilize applications for their
business benefit without requiring the large capital
expenses and implementation risks associated with
hardware, software, and implementation. In addition,
the model allows an organization's most valuable
asset, its people, to concentrate on their core
business competencies.
Low Risk/Low Cost
Typical applications have large startup costs - hardware, software, infrastructure
upgrades and implementation costs. In addition, these applications require
ongoing support services in the form of help desk support, maintenance, and
upgrades. These expenses are huge investments that do not ensure the success
and/or return on an organization's investment. By contrast, the ASP model allows
organizations to subscribe to an application without incurring the large costs
of hardware, software, and, most importantly, IT personnel. The ASP model is
particularly beneficial to organizations with budgetary constraints and/or
whose IT personnel are over-utilized.
Speed
Return on investment is a function of value over time. The quicker an organization
can get an application into the hands of its users, the quicker it can begin
generating value. The ASP model allows organizations to get online quickly
and focus on their core business. In addition, the ASP model significantly
reduces and, in some cases, eliminates the huge initial investment of time,
money, and personnel resources required to implement an application.
Scalability
Planning a system for 3-5 years is incredibly difficult. Hardware and infrastructure
will become obsolete, software will require maintenance and upgrades, and business
requirements will change. The ASP model eliminates this planning and its inherent
shortcomings by allowing an organization to grow at its own pace and stay within
its budgets. Whole divisions can be added as easily as one user and an organization
only pays for what it utilizes. Additionally, the risk of paying for poor planning
is eliminated.
Consistency
ASPs offer a new level of consistency by focusing on application performance.
Service Level Agreements (SLA’s) offer specific reliability measures
for organizations that require robust systems with little downtime. In addition,
organizations eliminate the risk of having only one or two experts per system.
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Why do companies use Online ASP services? |
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For several reasons: |
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1. |
Companies can more quickly
deploy a critical application by focusing solely
on the implementation phase |
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2. |
Avoid major issues
of hardware, software and middleware management,
maintenance and upgrades |
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3. |
Online ASP leaves a company
with only minor issues of network connectivity
to enable Internet access to the web-based
application |
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4. |
By minimizing the difficulty
of managing applications, companies can focus
on day to day business without distraction |
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How reliable is the service from an Online ASP? |
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When considering the case of a
larger or mid-market firm with many employees using
the system from remote locations, an Online ASP
service will be as or
more reliable than if the company had hosted the application on its own network.
Only companies with extensive experience with web-based applications will be
able to match the service performance levels of an Online ASP service provider.
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