Difference between SaaS and ASP

With cloud computing being the buzz word in the IT industry and SaaS being the early adopted model of the cloud computing world, people keep on asking what’s the difference between SaaS and ASP.

Saas is Software-as-a- Service and ASP is Application Service Provider.

Though some in the industry say SaaS is a subset of ASP and is one of the ASP delivery model, others say they are completely different.

Here is what I think from a user or customer’s perspective –


  1. Single-tenant approach
  2. Customized solution for each user
  3. User has authority on the solution hosted by the vendor and can demand the type of service required.
  4. User data could be hosted at any jurisdiction per user’s requirement
  5. SLA is unique to user
  6. Cost is based on user’s unique needs
  7. Monthly subscription on an as-used basis
  8. Borrowed (third party) software used
  9. User has the luxury to pull out of the ASP, buy the software from a third party retailer and host it somewhere else
  10. Once signed up, the vendor may take long time to customize
  11. Each user requires customized training and orientation which makes its usability cumbersome
  12. Solution need not be internet based


  1. Multi-tenant approach
  2. Same features and functionality to all users
  3. Solution is centrally managed, maintained and supported by provider. User is at the mercy of the provider and cannot demand any individual changes
  4. User data is hosted at a jurisdiction that the provider is comfortable
  5. Service Level Agreements (SLA) common to all
  6. Comparatively minimized cost than ASP
  7. Monthly subscription on an as-used basis
  8. Custom built software that is not available anywhere else is used
  9. User is unable to buy the software from a third party retailer and is limited to the SaaS vendor always
  10. Once signed up, the service is available immediately
  11. All users go through the same training and orientation making it easy to use
  12. Solution is always internet based

With all these sweet things that we hear about SaaS, should we look forward for “SaaS as a Strategy”? Not necessarily it depends on the type of application and the jurisdiction of the origin of data.

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