The distributed corporate networking technology environments of the 1970s and 1980s are gaining new life, only this time the move toward distributed networks is being led by upstart application service providers (ASPs). Organizations of the twenty‐first century are going to be Web‐centric and focus their objectives on agility and cost savings. Pressure to reduce overhead in information technology (IT) pushes these organizations to consider outsourcing. With the use of Internet technology, a new alternative for IT outsourcing has evolved. ASPs allow companies to access and run software applications over the Internet on a subscription basis. By using the Web as an application platform, an enterprise can quickly and easily deploy new systems in response to market changes as well as reap the savings of using a single, standard platform. Recently, there has been a tremendous growth in the number of ASPs. This growth in ASPs has raised several issues and challenges that need to be resolved to realize the potential benefits of ASPs. Discusses the developments in ASPs, outlines the activities of various kinds of ASPs, describes the ASP business models, and examines the issues and challenges facing ASPs for their future success.
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