There has been a great deal written in recent years about the advantages and disadvantages associated with On-Premises Software and Software as a Service (SaaS) enterprise solutions. Cloud computing is clearly a force to be reckoned with and as it reshapes the landscape of the business world it is changing how we think about data ownership, security and privacy. While the debate surrounding On-Premises Software vs. SaaS is sure to continue for some time, it seems that every opinion naturally comes from someone with a vested interest in your decision.
In the spirit of full disclosure let me make it clear that I work for a company which has built and developed an On-Premises relationship management framework for SharePoint. With that said, I want to emphasize our company motto which is “Customer Success is More Important to Us than Simply Selling Software.” This means that if our product is not the right fit for your business we will gladly point you in the direction of a product that is better suited to helping you meet your objectives and fulfill your requirements.
Factors Worth Considering When Making a Purchase Decision
- The level of customization you need and the complexity of your business situation
- Your security requirements, deployment time and level of scalability needed
- The level of integration required to work with existing systems
- Short term vs. long term cost effectiveness
- Your IT and administrative resources
Make the Choice That is Right For You
It’s clear that neither off nor On-Premises software systems will be disappearing anytime soon because the need for both still remains. This is important because quality of choice and variety of service matter. Across myriad industries and throughout organizations of all types, a common thread unites them: the fact that they are made up of what I like to call a unique DNA. This unique DNA is what makes Google different from Yahoo and Salesforce different from Microsoft.
Sure, these companies share market space, common interests and often compete with one another for business, but ultimately they possess fundamentally different and distinctive characteristics and qualities. When the time comes to solve problems, whether as individuals or organizations, there is no “one size fits all” solution.
To Believe or Not to Believe (In The Hype)
There is no doubt that the rise of SaaS has been unprecedented. The subscription-based software licensing and delivery model has undergone considerable growth since its inception. I think that this is, in part, due to the trickiness of the model itself. In nearly every instance companies will end up paying MUCH more yearly in a “per user per month” model. In 2011 the information technology research and advisory company Gartner forecasted that worldwide SaaS revenue would reach $21.3 billion by 2015, nearly doubling its growth from 12.1 billion in 2011.
According to Gartner, Customer Relationship Management (CRM) continues to be the largest market for SaaS vendors with revenue forecasts steadily climbing year after year as global markets respond to, adopt and integrate these new technologies. Clearly there has been intensive publicity for and promotion of this new licensing and delivery model. The potential to reduce IT support costs by outsourcing hardware and software maintenance is an alluring one that can make sense for some businesses in certain situations. If outsourcing is deemed to be economically advantageous, consider whether or not the cost savings are worth letting someone else have your business by the “cojones”. We firmly believe that any sensible assessment should include a thorough examination of all viable options and a rigorous cost-benefit analysis.
The Best of Both Worlds
A common misconception is that all On-Premises CRM software solutions require dedicated servers in-house. While it’s true they are often hosted internally (for security or other reasons), the belief that it must be this way in every situation is false. With the advent of “private clouds” businesses can reap the economic benefits of an outsourced scalable infrastructure while retaining the necessary control over that infrastructure. The private cloud provides a practical way for businesses to combine the advantages of cloud computing with the capability to manage risk as required by organizational mandates.
Public and private clouds serve different purposes and neither is better nor worse than the other. The same is true when it comes to On-Premises and SaaS solutions. In some situations subscribing to Software as a Service makes budgetary sense and in others it doesn’t. I’m not wholly opposed to SaaS as I myself pay a subscription fee for access to Adobe’s Creative Cloud. The fact is that although I love Adobe’s software, I feel like they implemented SaaS to “lock people in” and ensure continued sources of revenue, not because they thought it would benefit me as a committed user.
There is also the issue of security and privacy, highlighted in 2013 after at least 38 million Adobe accounts were breached. As someone who is required to use Adobe’s software unfortunately, I am stuck in the palm of their giant outstretched hand.
Are you are willing to surrender your entire business infrastructure to the hands of someone else? If you’re in a position that affords you a choice in which software you invest in, it’s advantageous to seriously consider both On-Premises software and SaaS options before buying.