Both ASP and SaaS business models provide for remote hosting of software applications at a server owned or controlled by the software vendor.

ASP Model: similar to a service bureau; the software vendor takes its proprietary software applications that are not web-native and provides access to them over the Internet or a “private network” through a browser or software client, with fees paid on a subscription basis. From a software architecture perspective, the term “ASP” usually refers to a single user/tenant accessing a single software application instance (i.e. one to one).

SaaS Model: the software vendor takes its proprietary web-native software applications that have been partitioned to provide for data security for multiple users simultaneously and provides access to them over the Internet through a browser, with fees paid on a subscription basis (often monthly). From a software architecture perspective, the term “SaaS” usually refers to multiple user/tenants accessing a single software application instance (i.e. one to many). There is a large value-add to the customer: low initial investment and commitment, no IT department, and especially since all problem resolution and maintenance is performed by the vendor. The SaaS terminology and business model have become the industry preferred term and model, generally replacing the earlier ASP term and model