Traditional Application Service Provider:

• Application services in a hosted data center style.
• Customer-specific applications run by one ASP.
• Expertise needed in each application.
• Service-level and financial failures.
• Customer needs for in-house expertise.

Software as a Service:

• Applications specifically designed to be hosted and delivered over the Internet to many customers.
• No need to buy the software from a third party.
• Customer specific instance of the application.
• Still economies of scale because of the simpler application scenario.