ASP business model provides software applications and servers to customers over the internet, with top-notch security measures and timely billing. It is tailored to the needs of the ASP and its customer base, and can be employed by any company.
The typical Application Service Provider (ASP) business model involves owning, operating and securing software applications and their supporting servers, distributing information over the Internet or other network, and timely billing for services used. ASPs provide customers with specific 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 start-ups that operate on a limited budget but require the benefits of the software provided by ASP. Examples of ASPs include online retail 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 agrees to the terms and conditions of the ASP, and with certain types of software, the customer may be issued a license to use it. These factors protect the ASP, as owners of the software, from any unexpected legal or financial issues that may result from the customer’s experience with their services.
Top-notch security measures play an important role in the ASP business model. Customers rely on the protection of their confidential information at all costs. ASPs are responsible for ensuring that customer data such as email addresses, physical addresses, phone numbers and tax payer information is kept confidential by not being sold to third party companies or hacked by internet thieves.
The ASP business model guarantees the proper functioning, maintenance and accessibility of its servers. A customer relies on easy login into the ASP software, and this requires the supporting servers to be operating correctly and accessible from any computer. The model also typically includes automatically updating the software and distributing information about changes and enhancements to the software or associated services.
As operating an ASP can be an expensive undertaking, timely billing of customers is an integral aspect of the business model. ASPs generally charge customers in one of two ways. A customer pays every time they use the service, or they charge a weekly, monthly, or annual fee.
These types of corporate structures can be employed by any company that advertises its services through an ASP. They can be molded to fit a consulting business model, an IT business model, or a retail business model, to name just a few. With very little deviation in business model development, the ASP pattern can work within the specific demands of many different companies and industries.
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