On-Premise vs. Hosted vs. SaaS
First and foremost, we just want you to be fully informed. Only then, can you make the right decision for your individual situation. We truly are Clients First! Our job remains relatively the same to implement, in any of the depoloyment models. SaaS came in hot and heavy to the market and was originally touted as the only “rational” choice among progressive, forward thinking companies. However, as is always the case, not everything turns out to be exactly as first touted.
We see more companies opting for owning the licenses and then putting those licenses in a hosted environment. Why? In a pure SaaS model, you are essentially financing the licenses. Unless you can’t afford the alternative of purchasing those licenses, you are putting those costs out over time – forever. And, SaaS is not like leasing a car. You can’t just give it back and go in another direction. The costs of moving to another system do not just entail the costs of software. The majority of it is Implemntation Services. Internal Expense. Disruption of your Business. And, don’t forget about the RISKS of doing an ERP implementation. Once you are on a particular platform, you will most likely stay on that platform for many, many years. It will cost you too much to change.
Further, the costs of hosting are dramtically falling. What used to be $99 per user/per month, just last year, is now $50 or less. In a SaaS model, you are essentially locking in your costs, just when you should be reducing them. And, at contract renewal, SaaS vendors know you have no alternative, BUT to pay their price increases. Why? They know you are locked in and can’t change. If they increase your monthly payments by $500 per month, what are you going to do? You aren’t going to change out your corporate system for $6,000 in the next year. The internal and external costs for you to change are into the 6 figures. Not to mention the disruption to your business.
To us, a “full” SaaS model gives too much control of your corporate systems and data to the ERP vendor. They even have control of your basic IT expenditures. Now, if you are OK with that….then that’s fine with us, as long as you go into the situation with eyes wide open, fully informed.
We find a hybrid model suits most companies better. Hosting is like the cell phone plans of old. Remeber when it cost you like 25 cents a minute? Then, the big guys jumped in, started competing against themselves, and now you have unlimited minutes for 1/10 the price. Don’t like the Service Levels of your hosting provider? If you own the licenses, then you can take them whereever you want. You software costs are finite. Your hosting (infrastucture) costs are falling.
That’s an effective model. And, that’s the benefit you have with SAP Business One!