ASP Isn’t SaaS. Is It?

A month or so ago I was running a CloudCamp in Australia. As always it was a great event but was made more so by a fascinating exchange between two very different people. On the one hand was Michael Folmer-Hansen from SaaS customer support vendor Zendesk, who was attending his first CloudCamp after Zendesk had sponsored 20 or so of the events from afar. At the other end of the spectrum was a group of people hailing from what we like to call “corporate IT”. In particular Graeme Speak, founder and CEO of, a company that provides virtual desktops – essentially virtualizing an entire PC or server network to provide remote access.

The interesting part of the discussion came when Graeme (and a number of others in the room) started talking about various issues around SaaS. Two specific issues were discussed, the first being the feeling from some in the room that SaaS is simply a rehash of technology from the 90s.

SaaS ≠ ASP

Before we had Cloud, we had managed services. Before we had SaaS we had ASP (Application Service Providers). ASP’s were essentially third parties that bundled up traditional desktop software and delivered it to customers remotely, via the Internet. The ASP model failed for a number of reasons, not least of which was that delivering clunky desktop software via a pipe that is of indeterminate and variable size and capacity, is a recipe for frustration. ASP delivered software provided users with admittedly full functionality, but unfortunately in many instances this functionality was crippled by the delivery method.

ASP’s also failed because they were trying to shoehorn software that had a business model of one to one, into a one to many delivery method. Desktop software simply isn’t licensed in a way that makes online delivery work – interestingly, I’d contend that it’s for this reason (among others) that Speak has chosen OpenOffice in place of industry heavyweight Microsoft Office for the GoPC offering.

Without going into a long diatribe about why ASP’s failed – here follows a few reasons that SaaS is best;

  • Cost of deployment – ASP deployed regular software and hence had high cost structures, SaaS is developed from the ground up to be small and efficient
  • Usability – ASP customizations were hard, user interfaces were traditional. SaaS brings a modern design aesthetic to software
  • Upgrades – ASPs were reliant on legacy vendors generally glacial development pace. SaaS is all about iteration
  • Integrations – ASPs were monolithic whereas SaaS is designed around integration via APIs
  • Support costs – ASPs generally added support on to the price of its software, with SaaS it tends to be all-inclusive
  • Hardware compliance – ASP often demands particular hardware, true SaaS runs in any modern browser on any operating system

So my advice for anyone who gets told that SaaS is just ASP by another name? Don’t believe it for a minute.

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