The ASP phenomenon: an example of solution innovation that liberates organization from technology or captures it?

Improved integration, centralized databases, access through Web browsers and application service providers (ASPs) are some of the current trends impacting on organizational decisions regarding IS/IT outsourcing. Web‐based technology liberated the client/server IT model from the limits of geographical boundaries delimited by a local area network. Partnering with the right ASPs could provide organizations with the new synergy required for competitive advantage. This paper outlines the development of a “solutions” innovation business model of rental‐based sourcing, charters current ASPs and the differences in IS/IT provision and offers an audit of the benefits and costs of ASPs to businesses and other stakeholders. Future challenges are mapped out for consideration as are strategic choices associated with continued outsourcing, as distinct from in‐sourcing, of IS/IT.