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Application Service Providers add Value to Businesses

In order to understand how application service providers add value to businesses, there is much information that needs to be thoroughly examined and discussed. The matter of service providers in general is one of great complexity and detail. Major issues in regards to service providers need to be addressed, as well as all of the key and related matters. After all, with any emerging or already established market, there are certain challenges that are critical to the overall scheme of things, particularly there are challenges of managing expectations of delivered products and services.

The support of these delivered products and services is highly relevant to this subject matter. In order to be able to understand this matter in relation to the field of cmoputers, we first need to come to terms with what application service providers(ASPs) actually are. ASPs are businesses that provide computer-based services to customers over a specific network, and “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. As well, the growing complexities of software have led to huge costs in distributing the software to end-users.

” (Wikipedia, 2007). Application service providers offer web-enabled software applications that are able to perform many different tasks, including outsourcing, promising additional benefits to business of economics of scale, increased scope of business applications, enterprise application integration and much more. Thus, application service providers are critical in regards to every part of day to day life for a computer business, especially for large companies, and this is why it is essential to be as informed on this issue as possible. Page# 2

Application service providers can be seen as an ingenious new way of allowing the selling and distribution of software and software services for computers, and although most people are not aware that ASPs were readily available even before the advent of the Internet, it is the Internet which makes them so easy to create, which explains why they have proliferated in the last several years. Although the application service provider model in general can be incredibly appealing to all businesses and companies, it is often times even more appealing to smaller computer businesses and companies and start-up companies.

The appeal of the ASP to smaller computer companies is largely due to the fact that the application service provider is able to drastically lower the overall costs of many types of software and services. Thus, there is an incredible amount of value added to businesses when they take the application service provider model into consideration, which makes it a large global phenomenon for many companies. “Companies are taking stock of their infrastructure and looking for more efficient ways to get things done…

They’re increasingly viewing rentable software as a way to add value and boost revenues…the market for ASPs totaled $2.7 billion in 1999 and is expected to zoom $22. 7 billion by 2003”. (Anderson, 1990). Summit Strategies estimates that ASPs are able to reduce deployment time by 30 percent to 70 percent overall. If a business wants to get the best value from an ASP, that business needs to be able to define the application service provider. This is most effective for most businesses in the computer field, as the ASP benefits their company dramatically. Defining an application service provider can often be rather difficult and even frustrating, as ASPs tend to be complex and confusing, which can cause a great problem for new businesses.

However there are certain issues and factors in regards to this situation which, if Page# 3 examined and carried out properly, will make the entire process much easier and less complicated. The best point of attack is to take a bit of time beforehand and examine an existing model of an ASP, as from this you will be able to gain an incredible amount of knowledge, which will make the entire process much easier to decipher. A process that is often easier for companies in the computer field, as computers and its many processes are part of their expertise.

There are both Internet and non-Internet types of application service providers; an Internet application service provider would obviously be an ASP that is available online, whereas a non-Internet application service provider would be something such as an airline. An airline is a perfect example of a non-Internet application service provider, because they give you and the company a choice, as you have the option of being able to own and operate your own jet for example, or you could charter a jet from an airline when one is needed.