What is Application Service Provider means?

There are two types of SaaS providers. The first has often been referred to as an Application service provider (ASP) where a customer purchases and brings to a hosting company a copy of software, or the hosting company offers widely available software for use by customers, such as hosting Microsoft Office and making that available across the web to customers who pay a fee per month for access to the software. The second type of SaaS provider offers what is often called software on-demand, where a company offers to customers software specifically built for one-to-many hosting. This means that one copy of the software is installed for use by many companies who access the software across the web.