The increasing number of companies that use the Internet and the use of broadband technologies for high speed connections opened the way for hosted applications to make significant headway in the software industry.
Hosted applications are computer programs or software which can be used without installing it on local servers or individual PCs. Users only need an Internet browser and reliable connection in order to use and access the software. These hosted applications are owned by application service providers and they use their own servers and hardware infrastructures to deliver the software to consumers. Users pay the ASPs whenever they utilize the software. Sometimes, a fixed monthly or annual fee is charged for the use of applications.
This model eliminates the need to install additional hardware or drive space to run the program. Because the program uses web interface, users can use it when they want to and wherever they are. The technology is a big help in reducing the cost of IT requirements of companies. It can eliminate big investments for powerful IT environments.
Hosted application also contributes to the increasing flexibility of company operations. Computing can be achieved even if employees work at different locations. Employees only need to access the companys account in order to use the necessary program. This will cut the cost of maintaining a centralized office.
Hosted applications are ideal for a company that wants to operate with minimum overhead capitalization. In fact this kind of technology can spawn virtual companies that operate primarily in cyberspace.