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21 Dec 2000, Greece

Dear Dr ecommerce

Everybody is talking about ASP technologies and solutions, can you explain to me what they mean?

Thank you in advance.

Stella

Dear Stella:

ASP is the abbreviation of "Application Service Provider". The concept is that instead of buying an expensive software application outright, a company would pay a subscription to an ASP who would provide the software, regular updates and probably some related services.

From the customer's point of view, an ASP offers a more complete package than just software. Moreover, the cost of the software is spread over a longer period - which is friendlier to company's cash-flow. Some ASPs also allow customers to rent software for a short period - this can be useful when a company needs a particular application for one job only.

From the ASP's point of view, regular subscription fees ensure a steady cashflow and, in the long term, ASPs will probably earn more via service provision than they would via selling software outright. Indeed, many software houses in the past have earned more from consultancy than they have from selling software.

For lots of information on ASPs, go to http://www.internet.com/sections/asp.html.

Good luck,

Dr. Ecommerce