e-business technology - service providers
Service providers include many kinds of businesses that provide outsourced services electronically to other businesses. The general concept is that the service is connected at the ‘backend’ of a firm’s operations to enhance their own product or service offering, or perhaps to do so at a lower cost than the firm could do itself.
Importantly, with any Service Provider, the key issues include reliability, security, capacity and speed. If a business depends on another to support a part of its business, it will become reliant on that service provider. Typically, a major firm would seek a SLA (Service Level Agreement) with its service providers, which might include penalties for significant ‘downtime’ or ‘service outages’.
These services tend to be abbreviated a ‘xSP’s, where the x is an abbreviation for the kind of service offered, for example:
ASP - Application Service Provider – a business that hosts a software application and usually provides access via a browser link, so that with a simple Internet connection and browser, software can be accessed and operated remotely.
MSP - Managed Service Provider also called a management service provider, is a company that manages information technology services for other companies via the Internet. Common services provided by MSPs include remote network, desktop and security monitoring, patch management and remote data back-up, as well as technical assistance. Most MSPs provide these services on a monthly basis which give small and medium sized businesses an option to have their IT needs taken care of instead of paying for on-site staff
PSP - Payment Service Provider (or IPSP – Internet Service Provider) – includes a range of different payment services such as Worldpay, Paypal, Nochex, Western Union and so on. These businesses allow other businesses to receive payments from customers via credit card, debit card and other electronic banking services. In particular for small businesses and individuals, a PSP can provide a secure and cost-effective solution; many such traders would be too small to afford the cost of setting up electronic payments themselves or might be considered too small for merchant facilities by their bank.
ISP – Internet Service Provider – offers internet access through broadband, leased line, ISDN, dial-up link, mobile access and so on. In many cases, ISPs also offer secure website hosting and associated email and data storage facilities.
TSP - Telecom Service Provider - a business or organization that offers users access to the Telephone and related services. In the past, most TSP's were government-run in most countries, due to the nature of capital expenditure involved in it. But today there are many private players in most regions of the world, and even most of the government-owned companies have been privatized.
There are innumerable other kinds of service providers, each with their own ‘xSP’ name and abbreviation, but the business principles would be analogous to one or more of the above.
Author: Steve Whiteley, January 2007
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