The benefits of SaaS (beyond low cost)

2010/02/10 in IT Strategy, Posterous by peg | View Comments

I’ve already written about why I think private clouds can be a good idea. Similar arguments can be made for SaaS, and then some. A friend and I did the email-ping-pong thing and ended up with a (shortish) list of reasons why to go with a SaaS solution over an traditional on-premises solution.

  • OPEX rather than CAPEX cost. The CAPEX gulp is minimised, and the ongoing costs are tied to your own operational cost (head count, etc).
  • Faster provisioning. SaaS is can be up to 90% faster to deploy than on-premises solutions. (Weeks/months rather than months/years.)
  • No more upgrades. You’re always on the latest version, and new features are roll out organically rather than every few years as part of a change management process.
  • More focused vendor and community support. As there is only a single version in play, support efforts from the vendor and user community are focused on the version that you’re using. This also avoids the problem of getting left behind on a stale and unsupported platform (been there, done that, and have the scars to prove it).
  • SaaS provides a platform that scales organically with our organization. You’re not required to invest in additional hardware, software, and provisioning processes, letting your business focus on the business.
  • Reduced IT involvement. IT resources can focus on specific business problems rather than the care and feeding of the system.
  • Try before you buy. Instead of a traditional big license gulp at risk, sign up for a handful of SaaS seats for a few weeks and try it out. (From @shermo1.)

Any more?

Posted via web from PEG @ Posterous

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  • Peter, I think you have captured the key ones. Perhaps worth adding/thinking about:

    - platform for development – e.g. force.com gives you a great platform to extend and add value to the core platform.
    - Library of re-usable applications online - people have said the AppExchange is the iTunes of the application world.
    - Can we add bandwidth benefits – usually very light weight and can be accessed anywhere. Of course the flip side is you become more reliant on your network & infrastructure to the outside world. Some solutions have addressed this with offline versions that can sync easily or keep local copies

    Like the iPhone, it’s not the phone that makes the device, it’s the applications – and that now stacks up to a whopping 140,000 or so.

    You could almost liken SaaS solutions to Social Networks - the more you invest in them, the stickier they become – that also means the cost of moving could be quite high...

    My concern with all this is often you are just shifting the problem from inside the organisation to outside. Yes, there are absolutely benefits of reduced IT involvement, upgrades taken care of for you, but what happens when everything is moved to a SaaS - you end up with a new problem – integrating all these SaaS solutions together.

    Esteban has also written some good stuff here - http://www.estebankolsky.com/2010/02/08/why-paa... on this - breaking it down to the three layers of cloud – an interesting read (focussed on contact centre)

    Ultimately, buying software as a utility is a great fit for the right businesses and business applications

    Cheers
    Nigel
  • shermo1
    How about try before you buy? Instead of a traditional big license gulp at risk, why not sign up for a handful of SaaS seats for a few weeks and try it out?
  • Nice one. I've added it to the list.
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