The ASP market is so new and so dynamic that even its definition is in flux. Some ASP services sound like ordinary outsourcing while others are clearly unique.

Phil Wainewright, managing editor of the ASP News Review, describes an ASP as a company that “provides computing, in real time, from a remote data center.”

Here are common characteristics of ASPs:

Supplies or provides access to applications on a rental basis. This distinguishes an ASP from an outsourcer, who may provide technical support for an application owned or licensed by the customer. An ASP generally owns the license for software that is then rented to the client.

The application runs on the ASP’s equipment. The application loads into memory and runs on the ASP’s computer, not the client machine. The client software is limited to communicating with the hosted application, similar to the way that client-server computing divides input and presentation on the client from processing on the server. A standard Web browser is the most popular client for ASP services.

Keeping track of the players and their roles in the ASP business is roughly equivalent to tracking an individual fish in a school of herring. Is the company a leader, a follower, a borrower, or a creator? The answer might be “yes” to all.

Microsoft has gone to some pains to come up with a “taxonomy” of ASP companies, which helps its own staff understand the complex nature of this new business environment. According to Microsoft, the key players in the business are as follows:

Facilities providers. Companies such as Exodus and Level 3 have huge data centers connected to the Internet and private networks with massive and multiple network connections. They provide hardware and related network management services for other companies.

ASP enablers. Companies such as DataReturn and Futurelink install and configure software platforms, including server software and server applications, such as Windows 2000 Advanced Server, Internet Information Server, SQL Server, BizTalk Server, Exchange, and Commerce Server, which provide the operating environment and software services for hosted applications written by other companies.