Today’s business models are all about being agile. Be it in the way the software is developed and delivered or the fluctuating demands are taken care of. The mantra today is to improve continuously and stay ahead of the competition. To achieve this, the SaaS route is the best option.
SaaS solutions give enterprises the flexibility they need to adopt the latest capabilities without paying the price for hefty upgrades, and expensive hardware. Unlike traditional on-premise software solutions, it helps save on costs and resources needed to maintain the infrastructure.
Moving from on-premise to SaaS has many benefits. These include improved efficiency, productivity, and accessibility of business operations.
As per Gartner research, SaaS continues to be the largest segment in the cloud market, with the revenue expected to grow by 22.2% to reach $73.6 billion in 2018. Gartner predicts SaaS to reach 45% of total application software spending by 2021.
This trend is likely to continue as more businesses adopt the subscription-based model. In a subscription-based model, the customer has the flexibility to pay a recurring periodic price to access products or services. As per Gartner predictions, by 2020, all new market entrants and 80% of historical vendors will offer subscription-based business models.
Still wondering if you need to move your on-premise software to SaaS?
Here are the top 8 reasons for any business to update their on-premise system to a cloud-based system:
Access to the latest technology
Technology today is evolving as you read this. That means technologies of today can become redundant tomorrow. Change is the only constant. For enterprises with on-premise software, upgrades cost more time and money. This would delay their developmental efforts while competitors get ahead. On the other hand, companies with SaaS applications can quickly and easily access the technology and domain expertise they need to deploy faster and reduce time to market.
Total Cost of Ownership
Cost always plays a major role in decision making, no matter how big or small the company is. While on the outset choosing an on-premise software seems to involve just a one-time investment as compared to the recurring cost of SaaS subscription, one cannot ignore the total cost of ownership involved with the former. The cost can easily add up to 20% of the license along with the additional hardware cost, maintenance and support, network monitoring, management and more.
On the contrary, in the SaaS model, many of the costs listed above are included in the subscription cost, which not only leads to a lower total cost of ownership but also reduces complexity and overhead. And more the savings, better the budget available for future investments, thereby helping enterprises grow and stay ahead of the competition.
As per the study conducted by Gartner, the annual cost of owning and managing software can be as much as 4X the cost of the initial purchase. This would also mean that the company may end up spending 75% of the total IT budget just to maintain and run the existing infrastructure. But, choosing the SaaS model ensures that the enterprises minimize the internal resource costs. This gives them an economic advantage.
Time to value and ease of implementation
The complexity involved with the implementation of on-premise software, the time is taken to procure and assemble hardware, manage operations and ensure a smooth run, would mean that the entire project would take really long to begin. Also, this complexity would also mean that scaling the software to meet higher demands would involve more costs and consume too much time.
SaaS deployments, on the other hand, are quick and easy, ensuring that the value realization is rapid and the deployment risks are low. The model can be easily scaled, based on requirement, are easy to configure and come with more flexible configuration.
Ease of Innovation
Technology is ever evolving. To gain an edge over the competition, it becomes imperative for the enterprises to adopt new technology quickly and evolve fast. The complexities involved with the on-premise software makes this process difficult and time-consuming.
Whereas the cloud-based application models ensure that you have a quick access to the latest version of technology as and when they release. They also give immediate access to new capabilities and features they develop.
Business value with trying and buying
Enterprises often buy new systems to meet their immediate requirement or as an impulse buy based on the current strategy. This involves an upfront capital investment without completely understanding the benefit.
This is a risky move for a high profile expense. SaaS applications, on the other hand, come with the flexibility of trial periods. They are always scalable. Subscription model ensures that the company doesn’t shell out huge upfront costs. Companies can try out different services and get more than their money’s worth.
Vendor accountability and engagement
When you buy an on-premise software, the software vendor’s role ends after the company pays the one-time price and the system is deployed. It then becomes the company’s responsibility to maintain the software thereafter.
On the other hand, SaaS vendors are financially motivated to ensure your ongoing success. They can give your company support 24 x 7 and be instrumental in improving your products and services.
In today’s fast-paced technological world, timing means everything. It could either give the company an edge over its competition or put it completely off track. Hence for companies who want to create history and stay on top, it becomes imperative to integrate SaaS.
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