Application Service Provider (ASP) definition

An Application Service Provider (ASP) produces software capability, hosts it on its servers, offers that capability to customers and delivers it via the Internet. Most ASP software is sold, but some are free.

The current term for this kind of offering is Software as a Service (SAS), and the primary distinction of SAS is that all of the processing power, and likely the storage of the customer's information, resides on the ASP's servers and not on the customer's computer.

There are many advantages to using the SAS offerings of an ASP, with perhaps the primary one being the availability of upgrades.