I'm sure most of you have seen and heard about cloud computing and Software-as-a-Service (SaaS)... but what do these things really mean and why should you care?
Cloud Computing simply means computing outside of the walls of your organization. With high speed internet access to most businesses, faster computers and excess computing resources, now you can leverage these excess computing resources over the Internet. Software-as-a-Service (SaaS) is a segment of Cloud Computing where you use Software over the Internet instead of having the software being hosted within the walls of your organization.
For example, instead of purchasing Enterprise Resource Planning (ERP) or Customer Relationship Management (CRM) software or other software that you install on computers at your site, you use this software over the Internet through an Internet browser. Why is it important..CASH..CASH..CASH
There are Many Costs Involved with Traditional On-Premise Software
With SaaS you do not have to pay for the Hardware, Hardware Maintenance, Software Licenses, Application Support and Application Upgrades. Application support includes your internal Information Technology (IT) staffing to support the application. Some of you may begin wondering if you are becoming software companies when you manage these types of software applications on your site.
____________COSTS__________________YEAR 1___________Subsequent Years________|
_______________________|_Traditional_|__ SaaS___|_Traditional__|___SaaS_____|
_______________________|_____________|__________|______________|____________|
Hardware_______________|____X________|__________|______X_______|____________|
Hardware Maintenance___|____X________|__________|______X_______|____________|
Software Licenses______|____X________|__________|______X_______|____________|
Annual Subscription____|____X________|_____X____|______X_______|______X_____|
Implementation_________|____X________|_____X____|______________|____________|
Training_______________|____X________|_____X____|______________|____________|
Application Support____|____X________|__________|______X_______|____________|
Application Upgrades___|____X________|__________|______X_______|____________|
_______________________|_____________|__________|______________|____________|
With SaaS, instead of spending $50,000 - $100,000 or more upfront and waiting 2 - 6 months before you get any benefit, you pay only a fraction of that cost each month while you are getting some benefit. This could save your organization over $100,000 in 2-5 years.
"Over the next 12 months, of the number of U.S. organizations initially implementing a business management application such as ERP or CRM, the percentage implementing a SaaS solution will approach the percentage of organizations deploying traditional licenses in that market." MBT Magazine
Simply put, if some of you are considering implementing an ERP or CRM system, make sure you evaluate at least 2 or 3 SaaS vendors in your mix of the traditional ERP/CRM software vendors. It just might provide you the additional cash to grow.
