Asp model vs SaaS model
Today we want to tell you the difference between SaaS and ASP, since sometimes it is not very clear for users.
What is SaaS
SaaS is a term that means the software as a service. This model may seem to be rather complex to understand out of hand, not to mention to be often confused with ASP. Thus, we will try to explain SaaS to you in plain language.
SaaS is a business model that doesn’t require to buy the hardware for your application. You don’t need a license. You pay to a provider and get the software via the internet. The provider bears responsibility for maintaining and upgrading your software.
While today’s cloud technology is already on the rise, Oracle shared its Top Ten Cloud Predictions 2019 on how the IT world in 2025 will look like. The research has shown that in 6 years 80% of all enterprise workloads will move to the cloud. And that is where effective SaaS management is a need.
According to the predictions, the days when we had time to try and get insights into SaaS have long passed. Our goal now is to use this model to its full extent to be able to catch up with the new flow.
What is ASP model?
Application Service Providers (ASP) is a service provider. It uses for accessing applications. They located on a remote from the consumer server, via the Internet or a private network. Applications are usually hosted by a third party. Often they not associated with the software vendor itself. The person who places the software may not have enough experience in the field of software. This can lead to low efficiency and slow response to problems. Support and upgrade require extra costs.
Currently, several types of ASP can be distinguished:
- Enterprise ASP works with large companies and enterprises. It renting complex high-tech solutions for them. Typically, the service includes individual configuration and full maintenance of the selected applications. Sometimes, the ASP takes on the training of enterprise employees to work with leased applications.
- Local/regional providers. Specialization of regional ASP – work with small companies in a small geographical region. As a rule, a set of the most common simple office applications is available for rent.
- Providers of specialized solutions (Specialist ASP). These companies provide access to applications that solve specific problems. Tor example, problems within a narrow sphere of professional activity or business. This can be user feedback, automation of personnel management, or rental of a Web server.
- Providers of complex solutions (Volume business ASP). Provide rental of pre-formed packages of services and applications. They uses to solve the main set of tasks in a specific market. The main area of activity is the complex service of small enterprises.
- Providers for operation and maintenance of finished business processes (Business process outsourcers (BPO)). Specialize in performing certain functions in business processes. For example, on customer service or delivery of goods.
- Providers of commercial networks (Commerce network providers). A business serving commercial networks for performing electronic data between companies. For example in the B2B area.
The applications they offer can be categorized as the following:
- Personal applications. Include application packages similar to Microsoft Office, games and educational software products;
- Means of communication and interaction – e-mail, applications for conferences, etc .;
- e-Commerce applications. Used in working with buyers and suppliers of the company. For example, electronic stores;
- CRM-, ERP-applications;
- vertical-specific applications for specific industries;
- analytical – financial analysis, analysis of customer demand, risks, etc.
The ASP model can be advantageous for small and medium-sized businesses. It allows them to get specialized software by outsourcing their main IT needs. ASP doesn’t require the distribution of the software. However, it provides constant technical support, security, and maintenance of up-to-date services. Moreover, ASP promotes the flexible working of the software.
ASP model vs SaaS model
The key difference between SaaS and ASP is the accession. By the SaaS model, the customer buys access to a few business functions, not to the application at all.
What about the framework of the ASP model? In this case, a customer receives a dedicated installation of software. This is deployed on the remote site and not having several owners.
The SaaS model offers various multi-tenancy benefits. Multi-tenancy here also means that every customer that uses the software is provided with the same version of it. Every customer gets the same upgrades and features for free, as a guaranteed benefit of subscription service. The SaaS model is scalable and eliminates the main difficulties with the customization process. For the vendor, the SaaS multi-tenancy will minimize the overall costs on operation and sales cycles, providing efficient resource utilization. The SaaS model allows for improving customer service and strategy.
ASP doesn’t provide multi-tenancy. However, the ASP model may be used by the vendor, who is looking for a simpler model for business and doesn’t want to spend time on re-architecting the product. Another difference is that the term ASP can mean not only business applications but also service or infrastructure software.
|Single-tenant approach||Multi-tenant approach|
|Personalized solution for each user||Same features and range of capabilities to all users|
|The user has power on the solution hosted by the vendor and can demand the kind of service needed||The provider manages, maintains and supports the solution. User cannot claim any specific changes|
|User data could be hosted at any jurisdiction per user’s requirement||User data is hosted at a jurisdiction that the provider chooses|
|Cost is based on the user’s requirements||Compared to ASP, cost is lower|
|User has an ability to buy the software from a third-party retailer and host it somewhere else||User is not able to buy the software from a third-party retailer and is limited to the SaaS vendor always|
|It may take a lot of time to customize||The service is available right after signing up|
|The usage of the solution may be difficult. It may be caused due to the necessity of customized training and orientation for each user||All users have the same manual making it easy to use|
|ASP is not necessarily internet-based||SaaS is always internet-based|
|Upgrades and enhancement are infrequent||Upgrades and enhancement are conducted quite often|
Sometimes it is said that SaaS – this is the same ASP, but named differently for marketing reasons. However, as we can see, the difference between these two models is quite significant. That’s why this opinion can hardly be accepted. So, we hope that the information written above has helped you to understand the difference between ASP and Saas model and now everything is clear for you.
Posted byApril 27, 2018
Max BabychCEO, Founder
I am serial entrepreneur and IT professional. Launched 4 own products and more than 20 products for customers in SaaS and Marketplace industry
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