How Do The SaaS And ASP Models Differ? By SpringCM

ASPs became popular in the late '90s, when the first wave of Internet enabled applications came on the scene. An ASP was typically a company that licensed a commercial software application (such as a DM system, ERP system, etc.) or, in some cases, assumed another company's license as its own, hosting the application in a secure, central facility. The asp then licensed that application to multiple companies, customizing versions of the commercial application, at a lower cost of ownership.

ASPs soon discovered, however, that the cost of customizing an maintaining modified versions of commercial applications was greater than anticipated. In many cases, ASPs did not control the feature set or development of the software they were deploying, so the ability to adapt the product was limited. Customers, many of whom had moved mission critical applications to the ASP model, soon discovered that ASP lacked domain knowledge to effectively customize the applications to their needs, and that the associated fees for doing so were not economical.

The bottom line? Cost and innovation benefits were limited.

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