These application service providers host the application on their servers and provide the customer access over a network for a fee, usually in the form of a monthly subscription. The ASP market is growing rapidly, largely because of the Internet. It has established universal network standards, making it possible for anything to connect to anything else. Further, today's software applications are much more robust and reliable than in the past. As a result, computer and communication performance have increased to the point that remotely executed applications can perform quite well, according to the Internet Research Group, a market research firm.
Organizations benefit in two key ways.
First, a hosted application can be deployed far more quickly than by traditional means. Outsourced software applications can be up and running in days or weeks, depending on complexity. Second, the upfront costs are far lower than with traditional IT projects. Typically, fees are based on the number of users per month. Internet companies love ASPs because they need to get certain applications up and running as quickly as possible to succeed in the dot-com world.