ASP … application service provider… these terms appear frequently in newspapers and magazines. These are the latest buzzwords in the ever changing IT landscape. Yet very few know what this term means or how ASP technology gives small-to-medium enterprises (SMEs) a competitive edge.

In simple terms ASPs 'rent' software to SMEs. In the new economy competition comes from ways known and unknown. It is not restricted geographically; your competitor can spring up from any corner of the globe, thanks to the Internet and the global e-commerce revolution. IT infrastructure involves significant upfront investments and a small-to-medium enterprise cannot afford such whopping investments. But SMEs cannot do without IT.

ASPs offer business applications on a pay and use basis to SMEs. Front office as well as back-office applications can be outsourced by the SMEs. The type of applications you can 'Rent-out' ranges from MS-Word to a complex ERP application.