The key to application server providers $($ASPs$)$ ability to reduce costs is:

A pay$-$as$-$you$-$go fee structure combined with a reduction in the required IT infrastructure

They do not have to pay licensing fees and can pass on the savings

They develop the required applications in house and provide the required services to the end users

They use older versions of software packages and can offer the services at a much lower cost than the most recent version