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SaaS (Software as a Service) or Cloud is everywhere right now and its adoption is rapid. Some companies are resisting it at all costs seeing it as going to the dark side and fearing lack of control or security, while others are rushing towards putting everything they can in the cloud as quickly as they can. A balance is needed as SaaS can bring benefits to companies of all sizes. However, organisations need to review it as simply another option to their business requirements that is now open to them.
The SaaS discussion is often being driven by the requirement to reduce costs, with so many IT departments tasked to reduce their overall spend year over year especially in these tight economic times. Independent analysts reports consistently validate SaaS as having this affect on businesses and reducing their TCO and delivering savings. So do the case studies from SaaS vendor customers who often cite savings from between 20-50% plus over their previous on network solutions.
There are additional benefits of SaaS over simple cost savings. For example, more resilience, more functionality and easier remote access from anywhere. Focusing on the cost savings however, there are three key areas where SaaS can make an impact; Initial cost savings; Ongoing cost savings and Peripheral savings:
- Initial cost savings SaaS can bring include easy deployment (particularly if you have multiple sites and mobile users) as the SaaS provider will host and run the service. Plus there is no need to buy and deploy any hardware. You also do not have to pay costs for what can be complex installs. With SaaS your focus is on business configuration and setup, ie. any cost you pay is for the actual settings to make the service more personal to your business. There is no price for installation.
- Ongoing cost savings includes removing the need for hardware refreshes as well as easier licensing models. Expansion is also easier as there is no additional install required should you open a new office or add more remote worker to your service. It is all included in the licence fee. Plus, the fee also includes support.
- Peripheral savings with SaaS, dependent on the type of application, can also include unlimited cloud storage, bandwidth savings, recognising the costs as OPEX (operating cost) rather than CAPEX (Capital expenditure needed for on network purchases) and reduced helpdesk tickets through providing greater solution resilience for your users.
When comparing on-network solutions to a SaaS offering ensure that you list out the following and validate if it is included in the price for both. If not, ensure it is included and that you are comparing pricing like for like! Compare software license, hardware costs, does it include a resilient software license, how much is the duplicate hardware to cost, what does installation cost (and how long will it take if billed by the day) what support do I get included and if not, how much is it, when an upgrade comes out how much time should I expect it to take to perform (and costs associated).
Ensure you build your TCO comparison to cover multiple areas including:
- Initial expenditure;
- Cost for IT operations in using the solution;
- Values to the business bought by each form factor.
Extend this comparison across the lifecycle expected of the solutions use – typically in IT anywhere between 2-5 years is common and cost compare in the three areas where SaaS can make an impact: initial deployment, ongoing costs and any peripheral costs depending on the type of solution being considered.