Application service provider is the new Internet buzzword. It describes a business model in which software is provided as an accessible service over distributed servers on the Internet. A growing number of applications (usually available as stand-alone programs on your computer), are also being made available as hosted subscription services. Hundreds of thousands of people use ASPs every day as an alternative to shrink-wrapped software. Established and emerging software companies are deploying such services. The ASP model introduces substantial changes in the way software is produced, used, and revised, and it forces us to rethink the whole software development process. The article provides some examples that demonstrate how widespread the model already is, and the challenges and opportunities this business model offers for computer scientists, software engineers, and designers of intelligent agent software.