Application service provider : a business plan

Abstract

An Application Service Provider (ASP) provides a contracted service, which offers to deploy, host, manage and rent access to popular packaged software applications. Customers, primarily enterprises, are served from centrally managed facilities. Clients access the service through Internet technologies. The ASP is responsible for providing all specific activities and expertise to manage these software applications. The ASP is a new ( or renewed) application delivery model. It represents a new ( or renewed) business model. Customers rent access to applications addressing enterprise-wide needs such as accounting or customer relationship management. Installation, maintenance, security, and updating responsibilities lie with the ASP, hence reducing expenses and IT infrastructure for the customer. In return the vendor receives a rent-like payment for its services. These revenues are shared between the software provider and the service provider. This thesis includes an industry analysis, a market assessment and plans for developing an ASP business. The business plan includes plans for developing the product, marketing, financing and staffing. Analysis suggests that although the service is likely to be(-come) very attractive to customers, it is also likely to have some commodity attributes. The ongoing challenge to create and sustain profit will be to continue to innovate so as to provide differentiation for the customers the ASP chooses to serve.