The “web-based working model” continues to evolve and change, and the value propositions around Cloud Computing and Software as a Service will also continue to change. The comparisons of on-premises solutions to Cloud and SaaS are moving further apart as the technology and the platforms evolve, and many of the “old rules” of purchasing and maintaining business software no longer apply. Does your on-premises software vendor work to win your business again, each and every day? And the last time your network went down… did your IT guy write you a check?
Cloud offerings are providing new ways to manage business information, and a new valuation approach is required to truly understand the costs vs benefits. With on-premises software offerings, a business could develop an RFP (request for proposal), asking consultants and vendors to specifically address each requirement and ensure the fitness of purpose of the solution. Cloud and SaaS offerings are often sold a little differently, and with a slightly differing value proposition. Cloud and SaaS solutions create an ability for the business to extend their reach to include customers, business partners, and 3rd party services seamlessly via the Web, which should mean that they deliver a much higher return than a more traditional, localized solution approach. Comparing costs and benefits carefully, and weighing the cost against the benefits realized, can help to determine if the solution is delivering the expected bang for the buck.
Consider that many SaaS solutions cannot offer the depth of functionality that an on-premises alternative might offer. Is that depth of functionality actually required in your business, or is the online solution lacking? Do you have the flexibility of not using new features or additions to your SaaS solution? In an offline or on-premises solution, it’s called software “bloat” when the product contains more than you want. In an online solution, you should have the ability to “switch on” new features if you elect to use them.
Cloud and SaaS and other subscription-service providers must win your business each and every day, unlike more traditional software vendors. Most Cloud and SaaS solution providers are compelled to constantly improve or embellish their solutions in order to be perceived as continually delivering new value. This perception ties to the billing arrangement, where you have to pay regular and recurring subcription service fees to access the SaaS solution. With the boxed software model, you could decide very easily to stop purchasing more software, but you had the benefit of continuing to use the solution you already paid for. If you wanted new features and new functionality, you had the option – usually during an upgrade cycle- to purchase them.
Cloud and SaaS solution providers offer (or should offer) an SLA, a service level agreement that describes the guaranteed availability of the solution you’re subscribing to. With an on-premises solution, you are often responsible for the installation, implementation, and maintenance of the product. With a Cloud or SaaS solution, this is offered as part of the service. Depending on the complexity of the application or service, this could be quite a cost and time savings for the business.
With cloud-based computing options increasing every day, business owners must take a fresh view of their business technology. Where once a small business owner viewed their IT as simply a tool to facilitate a process, now we are seeing the innovative use of technology as a strategic asset, enabling the business to reach beyond physical boundaries, develop new markets, and engage new customers. The challenge is to enable the business processes and gain those strategic benefits which would offset the potential increases in cost.
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