Built upon developments in selective outsourcing, application hosting and browser-based computing, the application service provider (ASP) model shifts the purchase of computing power from a product to a rented-service form. If it can overcome the challenges facing it, the ASP model will foster a new generation of distributed, component-based computing services characterized by finer computing granularity, global cooperation and specialization, multimedia data handling, binary integration, mobile computing and pervasiveness across a full spectrum of electrical and electronic devices. Applying generic network-centric computing will lead to a networked economy characterized by service integration.