The on- going costs are lower, too, since the supplier can amortize its costs across many customers. Pricing becomes predictable and simple. Using an ASP also makes sense in a business environment where mergers and acquisitions are rampant. Switching costs can be lower. This allows all users to take advantages of best practices.
ASPs also address the IT skill shortage.
High staff turnover and escalating salaries are creating stiff competition for the talented few. Outsourcing providers are more qualified to attract the best and brightest. Staffing becomes the outsourcer's problem.