This chapter introduces the ASP (Application Service Provider) industry which provides essential infrastructure for the Internet-based e-business transactions. First introduced is the current status of the ASP industry with some industry analysis focusing on the driving forces shaping the evolutionary changes. Then, emerging ASP business models are classified and analyzed in order to assess their positions in the competitive landscape based on the economies of scale. We also explore the prerequisites for the success of each ASP business model. Lastly, a conceptual model is provided to predict some possible scenarios of the evolution of the industry structure. For example, we identify the prerequisites for the ASP business models to develop themselves into XSPs (eXtended Service Providers), and develop a scenario for that evolutionary path. The proposed framework will present a deep insight into the e-transformation and a way to improve enterprise intelligence and performance through ASPs.