Choose or Lose

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Learning the lingo

If you think security issues can be tough to figure out, try tangling with the number of acronyms that fall under the ASP umbrella. We've put together a glossary to help you sort out this industry-specific jargon.

ASP (application service provider): Hosts and maintains applications, offering them to subscribers through the Web.

CRM (customer relationship management): Commonly offered application that manages customer relationships by automating crucial customer-related services-order processing, sales, marketing efforts and customer data tracking.

CSP (commercial service provider): The actual data centers where ASPs store companies' data.

ERP (enterprise resource planning): Commonly offered application that integrates all business functions, from human resources to accounting, into one application.

FSP (full-service provider): More common these days, this term refers to ASPs that offer a soup-to-nuts approach, allowing you to outsource multiple functions. They also usually run their own data centers.

IBS (Internet business service): IBSs are ASPs that have built their business from the ground up, so the applications were actually developed to be hosted on the Web. They offer the same services traditional ASPs do.

ISV (independent software vendor): A company that produces and distributes software. ISVs are beginning to partner with ASPs and offer software through them. This arrangement benefits both sides: The ASP hosts and maintains the application, while the ISV is able to reach a broader audience (smaller businesses that otherwise wouldn't be able to afford it).

SLA (service level agreement): A binding contract between an end user and an ASP. It details the specifics of your partnership, including customer service, data security and the repercussions if the ASP doesn't meet the provisions in the agreement.

TSP (total solutions provider/total service provider): This term has evolved with the ASP market and is closely related to the meaning of full-service provider. Companies that call themselves TSPs, whether they mean solutions or service, focus on the service end just as much as the application hosting. The term also refers to ASPs that integrate with other service providers so you can get all your needs met at one source.

WSV (Web software vendor): Software companies that have begun to offer ASP capabilities, viewing the ASP model as a way to build their revenues. Unlike ISVs, they do not necessarily partner with ASPs, but host the application themselves.

XSP ("X" service provider): Because of the confusion surrounding all the fledgling terms-ASP, FSP, TSP-this new term using the letter "X" has emerged to represent the entire industry.

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This article was originally published in the December 2000 print edition of Entrepreneur with the headline: Choose or Lose.

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