Isp Vs Asp Essay Research Paper ISP

Isp Vs Asp Essay, Research Paper


In today’s society, technology is the wave of the future. With the invention of the Internet, the world seems to get smaller and smaller, minute-by-minute. When using the Internet, one must have a service provider to access any information that is out there on the information superhighway. The two service providers I will be explaining in this report are Internet Service Providers (better known as ISPs and Application Service Providers (better known as ASPs). There is a big difference between Internet Service Providers and Application Service Providers. An internet service provider (ISP) is a company that provides individuals and other companies access to the Internet and other related services such as Web site building and virtual hosting. An application service provider (ASP) is a company that offers individuals or enterprises access over the Internet to applications and related services that would otherwise have to be located in their own personal or enterprise computers. In this report I will talk about the vast differences in these two service providers including their history, their current uses, and their future directions.


The most common way to access the Internet from home is with a modem and a phone call to an Internet Service Provider (ISP). Your computer connects via modem to the ISP, which in turn is connected to the Internet with a high-speed link. An ISP has the equipment and the telecommunication line access required to have pop on the Internet for the geographic area served. The larger ISPs have their own high-speed leased lines so that they are less dependent on the telecommunication providers and can provide better service to their customers. Among the largest national and regional ISPs are AT&T WorldNet, IBM Global Network, MCI, Netcom, UUNet, and PSINet. ISPs also include regional providers such as New England’s NEARNet and the San Francisco Bay area BARNet. They also include thousands of local providers. In addition, Internet users can also get access through online service providers (OSP) such as America Online and Compuserve. The larger ISPs interconnect with each other through MAE (ISP switching centers run by MCI WorldCom) or similar centers. The arrangements they make to exchange traffic are known as peering agreements. There are several very comprehensive lists of ISPs worldwide available on the Web.

Two men named Spike Ilacqua Barry Shein in 1989 invented the first ISP. Barry Shein came up with the idea and Spike Ilacqua made the idea work. In 1989 Barry started a small UNIX consulting company call Software Tool & Die. In late 1992 Barry told his idea to the National Science Foundation. The NSF allowed companies to sell dialup access to the Internet. On August 13, 1992, the two men ran the very first official ISP.

The most important issue when it comes to choosing an ISP is to find one with a local phone number for a person to dial. Otherwise the phone tolls may cost you more than the ISP itself. Most ISPs have several access numbers, or points-of-presence (POPs) as they are often called. In certain metropolitan areas, strong competition has driven prices down significantly. In more rural parts of the country, a person may only have a few ISPs to choose from and prices will be somewhat higher.

As far as emailing goes with ISPs, incoming e-mail is received by a persons ISP and stored in a mailbox for them on a computer known as a POP server. When that person connects to their ISP and run their e-mail program, the message is downloaded to a mailbox on their computer. At this point, the message is automatically removed from the ISP’s POP server since it is now stored on their computer’s hard drive (until they delete it in your e-mail program). A persons ISP will provide them with the address of their POP server, which they will need to enter into their e-mail program. (In this case, POP stands for Post Office Protocol, not to be confused with a Point-of-Presence, which is a local access number for an ISP.) Outgoing e-mail is essentially the same process in reverse. When a person sends a message from their e-mail program it is uploaded right away to the ISP. It is temporarily stored in an outgoing mailbox on a computer known as an SMTP server. Usually the message can be delivered right away, but if there is a problem delivering the message, it will be stored on the SMTP server until it can be delivered later. A person doesn’t need to stay dialed-in to assure delivery. A persons ISP will also provide them with the address of their SMTP server. In some cases, it may be the same address used for the POP server. (SMTP stands for Simple Mail Transfer Protocol.)

An ISP is also sometimes referred to as an IAP (Internet access provider). ISP is sometimes used as an abbreviation for independent service provider to distinguish a service provider that is an independent, separate company from a telephone company.

When talking to Derrick Lea, an IT specialist at Airborne Express, about the future of ISP and the ISP market he said “It is my view that the conventional ISP market of individuals is unlikely to be profitable for most people entering at this time. Many people have started thriving businesses based on this idea; but now it’s more the formerly auxiliary efforts such as web pages and electronic commerce, which dominate the universe of small companies.” It is my view that smaller ISPs are not going do very well in the future. It will only be the large ISP’s that will succeed. In doing more research on the market of ISPs, I found out that only 20 percent of the Internet service providers operate nationally, but these generate 80 percent of the revenues in the market, according to my research. My research also found that hosting accounts for almost 30 percent of all business revenues for ISPs, and those consumers remain unwilling to pay for value-added services. It is my belief that the future of ISPs will be dominated by the 20 percent of the Internet service providers that operate nationally.

ISPs started as a way to get individuals access to the Internet. Now, they do that and much more. They connect individuals and businesses to the net, design web pages, and write custom software, consult with businesses, and much more. There will always be a strong demand for ISPs in our growing technological society.


One of the most interesting behind-the-scenes business models that the Web has created is called the ASP, or Application Service Provider. ASPs are a completely new way to sell and distribute software and software services. Although ASPs were possible before the creation of the Internet, the Web makes them so easy to create that they have expanded a lot in the last couple of years. ASPs are very appealing to businesses, especially small businesses and startup companies because it can lower the costs of software and services for those types of businesses.

Sometimes referred to as “apps-on-tap,” ASP services are expected to become an important alternative, not only for smaller companies with low budgets for information technology, but also for larger companies as a form of “outsourcing” and for many services for individuals as well. ASP has come to symbolize companies that supply software applications and software-related services over the Internet. Most common features of an ASP include: The ASP owns and operates a software application. The ASP owns, operates and maintains the servers that run the application. The ASP also employs the people needed to maintain the application. The ASP makes the application available to customers everywhere via the Internet, either in a browser or through some sort of client, and the ASP bills for the application either on a per-use basis or on a monthly/annual fee basis. In many cases, however, the ASP can provide the service for free or can even pay the customer.

There are many advantages of businesses using ASPs. Some of these advantages include: The low cost of entry and, in most cases, an extremely short setup time. The pay-as-you-go model is often significantly less expensive for all but the most frequent users of the service. The ASP model, as with any outsourcing arrangement, eliminates head count. IT headcount tends to be very expensive and very specialized. The ASP model also eliminates specialized IT communications for the application as well as supporting applications. Also, the ASP model can shift Internet bandwidth to the ASP, who can often provide it at lower cost.

Another important factor leading to the development of ASPs has been the growing difficulty of software and software upgrades. Distributing complex applications to the end user has become very expensive from a customer service standpoint, and upgrades make the problem worse. In a large company where there may be thousands of desktops, distributing software can cost millions of dollars. The ASP model eliminates most of these problems.

ASPs come in all shapes and sizes. If a person were to start a small business today, they would probably begin by contacting three or four common ASPs, like a Web hosting company Companies like Verio and Webhosting provide a common ASP scenario — virtual web hosting. These companies provide hardware, software, bandwidth and people to host Web sites for companies and individuals. Typically they charge something like $15 to $30 per month for the service, and may host hundreds of accounts on a single machine. Another would be an email provider like a Web hosting company that provides some sort of email service with your Web hosting account. There are two other alternatives: Free services like HotMail or Yahoo Mail or email server ASPs who run Exchange servers, POP servers or IMAP4 servers and distribute them on a monthly fee basis. The advantage of the second approach is that the email address uses your company’s domain name rather than a domain name like Another would be a fax provider. One like Efax provides a free fax service that delivers faxes to your email box. This is an example of a free ASP. The huge advantage of using these ASPs is the fact that you don’t have to do anything to get started.

The “traditional” ASP sells a large, expensive application to large enterprises, but also provides a pay-as-you-go model for smaller clients. A typical example might be ad serving software or auction software for a Web site. Like Engage, who offers ad management software for Web sites. The software can be purchased on a yearly license costing tens of thousands of dollars per year. In addition, the software requires an Oracle database for the software to use. If the Oracle database is already installed and running in-house, then that is no problem, but if not it is a significant hurdle. The alternative is to let Engage manage the software as an ASP and to pay Engage a CPM price for the service. Unless you are serving millions of ad impressions per month, the ASP model makes tremendous economic sense. Another would be DoubleClick, who is essentially an ASP that offers advertising software plus an advertising sales force. Nearly any piece of expensive software, including giant applications like SAP, PeopleSoft and Oracle, now comes in an ASP version to allow these companies to reach smaller customers affordably.

While ASPs are forecast to provide applications and services to small enterprises and individuals on a pay-per-use or yearly license basis, larger corporations are essentially providing their own ASP service in-house, moving applications off personal computers and putting them on a special kind of application server that is designed to handle the stripped-down kind of thin client workstation. This allows an enterprise to reassert the central control over application cost and usage that corporations formerly had in the period prior to the advent of the PC. Microsoft’s Terminal Server product and Citrix’s Winframe products are leading thin-client application server products

ASPs today offer nearly any service a company might need. Many of these services (like email, Web hosting, ad serving, invoicing and bill delivery, payroll, etc.) are said to be “mission critical”. When talking to Bryce Conway, A specialist in ASP at Airborne Express, about businesses using ASPs, he told me that when looking at an ASP for a business, a business should take many precautions about what they are getting into. Here is a set of questions he told me a business should ask any ASP when interested in that ASP’s business:

? How do customers access the software? Is it through a browser or an application? If it is through a browser, how does the user experience feel?

? How are customer service issues resolved? If you (or employees) have questions and/or problems with the software, what happens? Does the ASP provide training?

? How secure is the data? You want to find out about internal security policies with ASP employees, passwords and access reports to protect your employees, firewall and other safeguards against external attack, and things like tape back ups to handle hardware failures.

? How secure is the connection between the ASP and the user? Data flows between the ASP and the user whenever the user accesses it. Is it secured by encryption, a VPN, proprietary techniques or some other system?

? How is the application served? Is your data on a dedicated machine or a shared machine? Both techniques are common and you often have a choice (with dedicated service being more expensive).

? How does the ASP handle redundancy? If a machine fails or an Internet pipe goes down, what levels or redundancy are in place to keep your servers online?

? How does the ASP handle hardware/software problems? If a hard disk fails or the application hangs, what are the policies in place around recovery?

Mr. Conway explained to me that if the ASP could give business accurate answers to all these questions, that particular ASP would be a good choice for any company.

In conclusion, there is a vast difference between Internet service providers and application service providers. Like stated in the beginning of the report an internet service provider (ISP) is a company that provides individuals and other companies access to the Internet and other related services such as Web site building and virtual hosting. An application service provider (ASP) is a company that offers individuals or enterprises access over the Internet to applications and related services that would otherwise have to be located in their own personal or enterprise computers. The difference being that ISPs are strictly related to getting someone on the internet and ASPs are a means of accessing specific software on the internet at an easier capacity. I believe that in the future, ISPs are going to become more and more of a standard way of accessing any type of information and ASPs will be the way of accessing all major software used on computers, especially in big corporations and in households. I believe I have learned a wealth of knowledge about ISPs and ASPs by writing this report. I feel that learning more about today’s technology will only help me get ahead of the game when pursuing any career. Learning about technology is one of the most important things to do in today’s society. I am glad I had an opportunity to get a head start.

graphy1. Choose Or Lose. (Evaluating application service providers) MIE-YUN LEE. Entrepreneur Dec 2000 v28 i12 p58

2. The ASP model hits the hut. (Company Business and Marketing) Hazel Ward. Computer Weekly Nov 2, 2000 p18

3. ISPS. (

4. Application Servers Seen Booming. (Industry Trend or Event)(Brief Article) Business Communications Review August 2000 v30 i8 p8

5. Free ISPs. (Company Business and Marketing) Robert Strohmeyer. Ziff Davis Smart Business for the New Economy March 1, 2001 p46

6. ISP / Web Hosting Directory. (

7. Sun: Paving the Road to Web Services. (Company Business and Marketing) Lee Copeland Gladwin. Computerworld Feb 12, 2001 p16

8. ISP Ranks Still Growing; Big Get Bigger. (Industry Trend or Event) Business Communications Review Nov 2000 v30 i11 p8


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