• Web based application requirements.Download-Upload image by DAN from Fotolia.com
  
  Application hosting is the process of outsourcing access to software applications to an Application Service Provider, rather than purchasing or administering the software using internal resources. The decision to use an application hosting strategy is driven by a desire to increase efficiency and decrease costs. Application hosting requires customers to have secure Internet access to the provider's premises to access server hardware, application software, administrative services and end user support. A Service Level Agreement is used to define the parameters and requirements of a hosted application strategy.
  
  

Server Hardware and Application Software

• Application hosting requires computer server hardware, networking operating system software and application software, such as Oracle, SQL Server or Lotus Notes. The application service provider provides a cost savings to hosting customers by absorbing hardware, software, license and maintenance expenses for a recurring monthly charge based upon usage. Customers that own their own application servers and want the ASP to host their equipment are using a co-located application hosting strategy. Co-location is typically cheaper than full service application hosting since there are no equipment and software rental or license fees from the hosting provider.
  
  

Application Administration and Maintenance

• Hosted applications require end user administration, database management, data archiving, backup and disaster recovery strategies. Full service application hosting provides service personnel to administer applications and data according to negotiated requirements. Customers that have application administrators on staff can request administrative access to support their own applications remotely at a reduced rate. Most service providers will not provide administrative access at the server operating system level (root access) unless a co-located application hosting strategy with customer-owned equipment is used.
  
  

Support and Service Level Agreements

• Service level agreements are used to define and specify the scope of application hosting support requirements. Service level agreements define application availability and up-time, end user support response times, backup and recovery procedures. Application hosting can involve mission critical processes for business organizations. It is important to include application monitoring intervals, thresholds and key application performance metrics required to run the business profitably. Specify the particular data elements to be archived, how often and where. Identify disaster recovery policies and procedures to follow if the data center should go offline. The service level agreement can include financial penalties and serve as grounds for termination of application hosting services if negotiated targets are not achieved.