SaaS vs. On-Premise: Which is a Better Fit for You?

(Feb 16 2010)

Categories:
Technologies: Cloud Computing, CRM, CRM Blog, ERP, ERP Blog, Green IT, on-demand, SaaS, web-based

Quotes

  1. “ Cloud Software as a Service (SaaS) offerings continue to grow impressively. ”
    By Ahmar Abbas
  2. “ The virtues of a hosted solution are legendary. ”
    By Bill Johnson
  3. “ According to our most recent survey, SaaS is still gaining market share, and a lot of the myths are being shaken off. ”
    By Shari Lava

Authors


  1. SaaS vs. On-Premise: Which is a Better Fit for You?

    By Pam Baker

     

    The two technology trends that have people buzzing this year are cinematic 3D visuals, like in the movie Avatar, and cloud computing. It’s a bit of a stretch to imagine that those tacky cardboard glasses with the colored film lenses are going to take over the business world, but the cloud computing thing is about as sure a winner in business as any bet can be.

     

    “Cloud Software as a Service (SaaS) offerings continue to grow impressively,” says Ahmar Abbas, senior vice president, remote infrastructure management of CSS Corp., a global IT company. “SaaS-only vendors have arisen in all key software domains and have successfully challenged the packaged software application companies.”

     

    There are solid reasons for such widespread and enthusiastic adoption rates.

     

    “The virtues of a hosted solution are legendary,” says Bill Johnson, chief executive officer of Jesubi.  “(SaaS providers’) hardware is consistently upgraded and amortized against thousands of other customers; software upgrades happen dynamically with no involvement from the end-user; response times allow for end-user success; and there are no incremental service fees to manage the hardware infrastructure or break/fix issues.”

     

    “It’s too common-sensical in today’s economy to do anything other than a hosted solution,” exclaims Johnson.

     

    It appears that companies from large to small are quick to seize these advantages and learn from the experience.

     

    “According to our most recent survey, SaaS is still gaining market share, and a lot of the myths are being shaken off,” says Shari Lava, senior research analyst for Info-Tech Research. 

     

    “The total cost of ownership (TCO) is about the same after three years – so don’t make your decision based on that,” she says. “And SaaS products have nearly equal functionality.”

     

    Considering myths have been busted and the old rules of thumb have been given the finger, how is one to know whether or not to thumb a ride on the SaaS bandwagon?

     

    Info-Tech’s Lava breaks it down this way:

     

    Choose SaaS CRM if…

    • There is no executive support or CRM strategy and you need something in the department right away.
    • You need to speed up implementation timeframes.
    • You need something right now that can grow with you quickly as needed. A lot of organizations that went through a failed big-bang CRM are trying SaaS, but are doing so cautiously and want to see results before they try to roll it out further.
    • You have too few IT staff available to administrate the system in the long term.
    • You have no disaster recovery plan for CRM data so keeping it on someone else’s locations seems smart.
    • Little offline capability is required.

     

    Choose On-Premise CRM if…

    • There is a legislative/regulatory requirement to host your own data or keep it in a certain jurisdiction.
    • Complex data integration with large data volumes is needed. Info-Tech’s survey suggests that customers are still having trouble getting the kind of tight integration mid-large size organizations need. Solving that is key for SaaS products to continue to move up market. Data integration is tricky enough to begin with, but there are many factors that complicate it further, such as large data volumes integrated across the web and firewall configuration issues.
    • You want to align CRM with your existing ERP vendor and the on-premise product is different or superior.
    • Heavy offline capability is required.

     

    Perhaps the best news is that neither on-premise nor SaaS CRM systems require the 3D glasses to operate. Now go forth and profit!

     

     

     

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