goldess - 05 Mar 2006, 06:58 am
The information technology industry is almost as fond of acronyms and abbreviations as the finance profession, but the increasing popularity of third-party software suppliers has created its very own bowl of alphabet soup: ASP, BSP, MSP, PEP, SaaS and WASP – to name but a few.
While the definitions are important, they matter a great deal more to suppliers than they do to the customers who use their systems, or the accountants who work with and for them. As a finance professional, you need to be more concerned with the business possibilities these terms of reference represent than you are with their meaning. All of the abbreviations listed above refer to slightly different types of third-party suppliers of software and systems. But they are all, in one way or another, concerned with providing information and communications technologies.
The major appeal of third-party software suppliers is the lack of up-front investment in software and systems needed to utilise them. Software suppliers charge on a per use or subscription basis, making it easier for businesses to budget and plan ahead and enabling them to replace complex total cost of ownership calculations with consistent and predictable costs. Software-as-a-Service (SaaS), for example, is a delivery model that uses a network (most often the Internet) to provide customers with access to commercially available software (not bespoke or custom software) while relieving them of the associated maintenance, daily technical operation and support, and relentless upgrade cycle.
An increasing range of applications are being provided to companies of all shapes and sizes using the SaaS model. Available systems include general productivity tools such as Microsoft Office plus myriad specialised applications for tasks ranging from accounting to sales force management.
Many suppliers of SaaS like to differentiate themselves from Application Service Providers (ASP) but the difference between the two will be negligible to many users. Some SaaS suppliers use specially designed software to offer ‘software on demand’, where one copy of an application is installed and used by many companies. From the users’ point of view, with SaaS there is no division between hosting and licensing fees. With ASP, the service company charges users a monthly fee for hosting applications that can just as easily be sourced by them as their client.
Trying to differentiate between the various abbreviations can seem like a pointless exercise in semantics. A lot of the terminology overlaps, so ASP and SaaS providers can also be categorised as Business Service Providers and Managed Service Providers. Because a BSP is an ASP that focuses on providing and hosting applications related exclusively to business functions, while an MSP manages both infrastructure and services, which can, of course, include software. Unfortunately, all three of them could also be a PEP or a WASP – and you thought GAAP, IAS and IFRS were a challenge.
From March Student Accountant.
While the definitions are important, they matter a great deal more to suppliers than they do to the customers who use their systems, or the accountants who work with and for them. As a finance professional, you need to be more concerned with the business possibilities these terms of reference represent than you are with their meaning. All of the abbreviations listed above refer to slightly different types of third-party suppliers of software and systems. But they are all, in one way or another, concerned with providing information and communications technologies.
The major appeal of third-party software suppliers is the lack of up-front investment in software and systems needed to utilise them. Software suppliers charge on a per use or subscription basis, making it easier for businesses to budget and plan ahead and enabling them to replace complex total cost of ownership calculations with consistent and predictable costs. Software-as-a-Service (SaaS), for example, is a delivery model that uses a network (most often the Internet) to provide customers with access to commercially available software (not bespoke or custom software) while relieving them of the associated maintenance, daily technical operation and support, and relentless upgrade cycle.
An increasing range of applications are being provided to companies of all shapes and sizes using the SaaS model. Available systems include general productivity tools such as Microsoft Office plus myriad specialised applications for tasks ranging from accounting to sales force management.
Many suppliers of SaaS like to differentiate themselves from Application Service Providers (ASP) but the difference between the two will be negligible to many users. Some SaaS suppliers use specially designed software to offer ‘software on demand’, where one copy of an application is installed and used by many companies. From the users’ point of view, with SaaS there is no division between hosting and licensing fees. With ASP, the service company charges users a monthly fee for hosting applications that can just as easily be sourced by them as their client.
Trying to differentiate between the various abbreviations can seem like a pointless exercise in semantics. A lot of the terminology overlaps, so ASP and SaaS providers can also be categorised as Business Service Providers and Managed Service Providers. Because a BSP is an ASP that focuses on providing and hosting applications related exclusively to business functions, while an MSP manages both infrastructure and services, which can, of course, include software. Unfortunately, all three of them could also be a PEP or a WASP – and you thought GAAP, IAS and IFRS were a challenge.
From March Student Accountant.