Application Service Providers (ASPs) were the 1990s-2000s precursor to SaaS per the Wikipedia history. Modern terminology: SaaS (Software as a Service) for hosted apps, PaaS (Platform as a Service) for hosted platforms, MSP (Managed Service Provider) for outsourced IT. All share the model: someone else runs and maintains the software for you.
Table of contents
- The ASP era (1990s-2000s)
- SaaS (Software as a Service)
- PaaS (Platform as a Service)
- MSP (Managed Service Provider)
- IaaS, PaaS, SaaS, MSP compared
- The modern application service provider landscape
- FAQ
The ASP era (1990s-2000s)
ASPs delivered business applications over the internet or private networks:
- Salesforce (founded 1999 as an ASP for CRM).
- NetSuite (founded 1998).
- Many smaller ASPs for vertical markets.
The team that uses ‘ASP’ is referring to the historical model. Most modern services are called SaaS.
SaaS (Software as a Service)
Modern terminology for hosted applications:
- Salesforce, HubSpot, Slack.
- Google Workspace, Microsoft 365.
- GitHub, GitLab SaaS.
- Netlify, Vercel.
The team that uses SaaS has apps delivered over the internet, no on-prem install.
PaaS (Platform as a Service)
Hosted platforms for building apps:
- Heroku, Render, Railway.
- Google App Engine, AWS Elastic Beanstalk.
- Vercel (Next.js), Netlify (JAMstack).
The team that uses PaaS has the platform managed (runtime, scaling, TLS) - they just deploy code.
MSP (Managed Service Provider)
Outsourced IT operations:
- 24/7 monitoring, security, backup.
- Patching, incident response.
- Often for SMBs without in-house IT.
The team that uses an MSP has external ops team for non-core systems.
IaaS, PaaS, SaaS, MSP compared
| Model | You manage | Provider manages |
|---|---|---|
| IaaS (EC2, GCE) | OS, runtime, app | Hardware, network |
| PaaS (Heroku) | App, data | Everything else |
| SaaS (Salesforce) | Data, config | Everything else |
| MSP | Per agreement | Per agreement |
The team that picks based on operational capacity has the right model.
The modern application service provider landscape
Most companies use a mix:
- SaaS for SaaS-able workloads (email, CRM, etc.).
- PaaS for app deployment.
- IaaS for custom infra (databases, specialized services).
- MSP for ops overflow.
The team that uses this mix has the right tool for each.
FAQ
What’s the difference between ASP and SaaS?
ASP is the historical term (1990s-2000s). SaaS is the modern term. They mean the same thing - hosted software delivery.
Is AWS a PaaS?
Mostly IaaS (EC2, S3, VPC). Some managed services are PaaS-like (RDS, ECS, Lambda). The team that uses AWS has mostly IaaS with some PaaS.
Is Heroku PaaS?
Yes - Heroku is one of the original PaaS platforms. The team that uses Heroku has minimal ops work.
What’s the difference between SaaS and managed services?
SaaS: hosted application you use. Managed services: hosted infrastructure you use to run your own code.
Is Vercel SaaS or PaaS?
PaaS - Vercel hosts your Next.js app’s runtime (build, deploy, edge, SSL). You just push code.
If you are sizing the infrastructure for the kind of project this post covers, the RunxBuild hosting calculator is the right place to model the line items. The compute, the memory, the storage, the bandwidth, the database - each one is a separate number, and the team’s mental model for the platform is the sum of those numbers. The RunxBuild dashboard is where the team sees the actual usage in one place.
Useful related references: