Cloud first – ‘To Saas or not to saas’

To Saas or not to SaaS – easily one of the toughest questions facing businesses across the globe especially with the rise of the SAAS giants.

Organisations are more than ever, asking the question, should they buy on premise software or go with Software-as-a-Service.

Gartner predicts that, overall, the public cloud services market (including Software as a Service (SAAS), cloud Business Process as a Service (BPAAS) and Infrastructure as a Service (IAAS)), will grow 18% in 2017 to a total $246.8 billion.  The largest market in 2017 will be Software as a Service (SaaS) and is due to overtake BPaaS, cloud business process services this year in terms of growth, and should reach a staggering $75bn by 2020.

With this new phenomenon, businesses simply cannot ignore the concept of putting ‘cloud first’ but sometimes stepping into the unknown can be scary.

Here’s our checklist to see if SAAS would work for you:

Is saving money a priority?

Come on, we all want to save money, don’t we?  Getting a decent return on investment (ROI) is always a key factor when making any purchasing decision and it’s important to do your due diligence at the start to get the best deal for you.

Often, when making a purchasing decision, companies only compare the price of on premise software with the recurring cost of a SaaS subscription and opt for on premise because of the perception that it may be better value for money, but often this is a faux pas.

Now, of course, the numbers above are important, but they shouldn’t be considered in isolation.  On-premise solutions require not only the purchase of the software, but a lot of additional extras such as: support costs (typically circa 20% percent of the license fee), additional hardware, additional resources for ongoing maintenance, network monitoring, management tools and much more. In a SaaS model, many of the associated costs listed above are either included in the subscription cost, or much reduced. This leads to a lower total cost of ownership and also reduces complexity and overhead.

Are your technical team always busy?

Technical teams across the globe are notoriously busy and are often too far removed from day to day operations to understand the wider implications of an issue not being fixed. For example, there is system downtime; often an IT department will focus solely on getting to the route of the problem rather than fixing the issue promptly. Bombarded with day to day technical issues, these quickly become the priority so implementing new infrastructure could see its way down the list of priorities whereas implementing SAAS systems, often teams can do it themselves with minimal IT involvement and often these systems have support materials and a technical team available on hand should a problem arise.

Are you prepared for high resource costs?

Gartner estimates that the annual cost of owning and managing software applications can be as much as 4x the cost of the initial purchase. In fact, companies can spend up to 75 percent of their total IT budget just to maintain and run existing systems and infrastructure. With cloud-based applications, the internal resource costs are minimised, further adding to their economic advantage.

Are you prepared to wait for the necessary infrastructure to be put in place?

On premise software implementation can often take years, and as circumstances change, priorities, resources and budget can shift, often delaying or indefinitely stalling these time-intensive, IT projects. SaaS deployments, on the other hand only usually take a few months, with some going live in  as little 30 days. This ensures that value realisation is as rapid as possible and lowers the overall deployment risk. SaaS applications require less coding, are simple to scale as your business needs change, are easily configurable, and have more flexible integration options.

Do you want access to the most recent innovations?

Once you buy on premise software, the technology immediately begins to age. Getting the latest innovation requires a time-intensive and costly upgrade and is typically not available for at least a year. Consider how you feel when the newest version of the iPhone is released and you just purchased the previous version 6 months before. Wouldn’t you rather have the latest and greatest innovation as soon as it’s available and avoid a lengthy and expensive upgrade process? The beauty of SaaS is that you will always be on the most recent version, with immediate access to new capabilities and features as they become available. Your subscription actually appreciates over time, giving you even more value.

Do you want flexibility and a chance to try before you buy?

When it comes to software, many companies make purchase decisions without a good understanding of the value the software will deliver to their business. They make a large up-front investment in the form of a capital expenditure, without test driving the system first —a risky move for such a large, high-profile expense. Most SaaS applications enable companies to test or pilot the application first, to ensure there is business value in the application.

Do you want to be accountable for your infrastructure?

On-premise software vendors get large up-front license fees, recognising the full value of your purchase on day one. After deployment, it becomes your responsibility to maintain the software going forward. On the other hand, SaaS vendors are financially motivated to ensure your ongoing success. Their entire business model of recurring revenue is dependent upon your satisfaction and usage.

Are you worried about security?

‘49% of IT decision makers admit they are “very or extremely anxious” about the security implications of cloud services’ 

The infamous iCloud hack back in 2014, which saw the private images of celebrities leaked online, was arguably the most high-profile that shook the public due to the widespread media coverage it received. This has continued to raise questions around other cloud-based services.

Since then businesses have more anxious about putting ‘cloud first’ because they think that it less secure.  And here lies the great myth.

The truth is that the public cloud is more secure than the typical data centre: the bad press has meant that tougher security measures have been adopted by SAAS companies. On-premise systems are typically a mix of technologies from different eras. The aging infrastructure is often less secure than the modern technology used by cloud providers simply because the old, on-premises technology was designed for an earlier era of less-sophisticated threats. Because on premise systems are aging, their security can be easily defeated by hackers as the Hilton hotel chain, found out.

Ultimately, the cloud simplifies hosting and enables applications to scale up and down as customers’ business needs change, and support distributed users.

Better decisions require the best model. So, ask yourself: Is a SaaS model the answer for your business? If the answer is yes, then embrace the change and ‘put cloud’ first.