Application Service Providers (ASPs) and SMEs: An Evaluation of What ASPs Offer SMEs

Information and communication technologies (ICTs) play an increasingly important role in small and medium-sized enterprises (SMEs). ICTs can affect an SME’s operational effectiveness, growth possibilities, competitive position, and overall firm performance. A major problem for SMEs is how to acquire appropriate software and hardware as well as how to develop or acquire capabilities to deploy ICTs in effective and efficient ways. It has been argued that Application Service Providers (ASPs) can provide SMEs with appropriate ICT resources and capabilities. ASPs is an organizational information systems approach based on that organizations buy or rent their ICTs and services over the Internet rather than owning and maintaining their own hardware, software, and computer-based information systems. It is predicted that previous proprietary architecture—where companies built and maintained unique internal information systems (IS)—will to a growing extent be substituted with an open architecture where companies can rent data storage, processing power, specific applications, and other services from different types of external service providers. This approach makes it possible for SMEs to, at decreased costs, get access to hardware and software without owning them. It also means a possibility for SMEs to get access to knowledge crucial for deploying hardware and software in an effective and efficient way. Generally, ASPs and the outsourcing market have primarily targeted large organizations, but increasingly we see that SMEs are targeted. The literature suggests that studies focusing on ASPs and SMEs are sparse.