Application Service Provision (ASP), which consists of deploying, managing and remotely hosting software applications through centrally located servers, is emerging as a new form of application outsourcing that is attractive to many sectors. This chapter shows that the concept of strategic alliances is highly relevant to the ASP model. The chapter illustrates this with two cases, one of which was a failure because of inappropriate partnership management. The authors highlight the importance of focusing on the management of alliances instead of how to form them, by presenting a life cycle approach to alliances. The chapter also relates the immaturity of the ASP market to the difficulty in measuring the success of strategic alliances formed in this context. This chapter concludes by presenting predictions about the future of ASP.