ASP business models provide software applications and their supporting servers, distribution of information over networks, and timely billing of services. ASPs benefit individuals and startups with tight budgets, and high-level security measures protect customer data. Timely billing is integral, and the model can be tailored to fit various industries.
The typical Application Service Provider (ASP) business model involves the ownership, operation and security of software applications and their supporting servers, the distribution of information over the Internet or other networks, and the timely billing of the services used. ASPs provide customers with particular services that would normally employ the use of expensive software that the customer would have to purchase. These services make the ASP business model especially beneficial for individuals and startups who are operating on a tight budget but require the benefits of the software provided by ASP. Examples of ASPs include online store and auction sites, blogging platforms, and standardized databases for use in government applications.
An ASP business model plan is unique among the many types of business models prevalent in the offline world. It is specifically tailored to the needs of the ASP and its customer base. In a typical ASP model, a customer accepts the terms and conditions of the ASP and, with some types of software, the customer may be issued a license to use it. These factors protect the ASP, as the owner of the software, from any unforeseen legal or financial problems that may arise from a customer’s experience with their services.
High-level security measures play an important role in the ASP business model. Customers rely on the protection of their sensitive information at all costs. ASPs are tasked with ensuring that customer data, such as email addresses, physical addresses, phone numbers, and taxpayer information, is kept private by not being sold to third-party companies or hacked by internet thieves.
The ASP business model ensures the proper functioning, maintenance and accessibility of its servers. A customer depends on simple access to ASP software and this requires support servers to function properly and be accessible from any computer. The model usually also includes the automatic updating of the software and the distribution of information regarding changes and improvements to the software or associated services.
Since running an ASP can be a costly undertaking, timely billing of customers is an integral aspect of the business model. ASPs usually load clients in two ways. A customer pays each time they use the service or pays a weekly, monthly or annual fee.
These types of business structures can be employed by any business that disseminates its services through an ASP. They can be modeled to fit a consulting business model, an IT business model, or a retail business model, to name just a few. With a minimal detour in business model development, the ASP standard can work within the particular needs of many different businesses and industries.
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