ASP (Application Service Provider)

Posted in Operations and Supply Chain Terms, Total Reads: 3228
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Definition: ASP (Application Service Provider)

ASP or Application service provider is a third party firm which provides the use of a software based services through the internet from a central data centre. The software being provided in this form is typically referred as on-demand software or software as a service (SaaS).

The rationale behind such a system is that the very high licensing costs for specialized software outweigh their utility hence; such a system makes it economically viable for small and medium scale businesses to have access to such software.

ASP can be broadly divided into five categories:

  1. Enterprise ASP: Deliver business applications
  2. Local/Regional ASP: Supply small applications for businesses in a local area
  3. Specialist ASP: Provide specialist applications for a specific purpose
  4. Vertical Market ASP: Provide industry specific applications
  5. Volume Business ASP: Supply general pre-packaged applications in large volumes


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