ASP vs SaaS Software Delivery Models: Main Differences

The difference between Application Service Provider (ASP) and Software-as-a-Service (SaaS) delivery models is significant, yet many people confuse the two because they are both “hosted.” It’s important to know that just because a solution is hosted, that doesn’t mean it provides the benefits of a SaaS solution.

In a SaaS model, a software application is comprised of a single, integrated code base that is delivered as a service to multiple customers simultaneously and securely, via the web. Additional capacity, add-on components, and new or upgraded features can be delivered to all customers simultaneously.

One of the most significant advantages of SaaS is that it is multi-tenant. Multi-tenant architecture lets multiple companies share the same instance of a technology solution while their specific data is securely partitioned from other companies. In an ASP, each company has its own instance of the software application and supporting infrastructure, which is much more inefficient and expensive than a multi-tenant solution. 

The SaaS model is also more nimble in adapting to changes in the market. Other advantages of the SaaS model include:

• It’s always up-to-date
• It’s designed for the web, rather than adapted to it
• It’s more efficient and effective to support
• It typically provides higher service levels
• It’s easy to integrate with other SaaS systems

SaaS providers can fully leverage economies of scale and reduce operational costs. At the same time, multi-tenancy enables SaaS providers to more easily share best practices and knowledge, and to quickly incorporate and disseminate improvements across a customer base. This directly affects the customers’ total cost of ownership in a positive way.

To learn more about the details of ASP and SaaS Software Delivery Models, download the white paper “Making Sense of ASP and SaaS Software Delivery Models.”