SaaS vs PaaS - it's a brave new world out there!
SaaS (Software as a service) platforms are becoming mainstream and had a big impact on what we do at it works. In the last 10 years, we have gone from evaluating, selecting and implementing "on premise" ERP and E-Commerce systems to almost exclusively SaaS platforms. There's also the option to go PaaS (Platform as a service)
What are the differences between Saas, PaaS and "on premise" systems? In simple terms;
SaaS platforms are hosted in the cloud and there is only 1 version of the system with each customer having an account within that system
On premise systems are hosted on your own hardware in your server room and your IT team supports the software and servers. You have your own version of the software and you can customise it if you need to
PaaS platforms are "on premise" systems with the hosting in the cloud offered as a managed service, so your IT team don't have to manage servers and worry about security or scaling capacity and performance
On balance SaaS is a much easier proposition than "on premise" or PaaS and this is why SaaS is becoming the new "norm".
The evolution has meant greater agility to select and implement systems in weeks or months rather than months or years. With this greater agility, the risk profile of ERP and E-commerce projects has reduced significantly.
A bad decision in the past has meant ongoing pain of retaining an unsuitable system in order to sweat the asset due to significant capital investment. ERP systems would remain in place for 10+ years due to the prohibitive cost of upgrades or replacement.
SaaS makes it viable to replace an aging system as the new breed of SaaS systems are mature and highly configurable without need for customisation or development. Couple that with an ecosystem of connected 3rd party apps, it is much easier to achieve what you need with a suite of applications that work seamlessly with each other.
In summary Saas Platforms make sense because
SaaS systems are usually billed on a monthly plan with short initial minimum term commitments (low Capex)
SaaS solutions benefit from significant R&D due to the economies of scale
SaaS systems are supported by other SaaS applications that can be bolted on with in-built connectors, requiring little or no integration development
With free trials, it is possible to do a Proof of Concept to connect multiple SaaS systems and further confirm that the solution will meet your needs, reducing the risk of making the wrong decision
No more hardware or server maintenance
Can scale with your business without high investment in infrastructure
Support is handled by the SaaS platform vendor so you don't need a team of specialists to support your systems
Your systems is continuously upgraded to take advantage of new functionality without the pain associated with "on premise" system upgrades
The main disadvantage of SaaS platforms - what you see is what you get. The system will do what the software vendor designed it to do and you cannot customise it.
and the pros and cons of the PaaS and on premise alternatives;
On premise systems
Pros - You can customise the system to how you want it if the base functionality isn't adequate or you want a competitive edge.
Cons - Scaling either capacity or performance requires purchase of hardware which you then own even if you only need it for 2 weeks in the year for peak trade. Custom development can be expensive and slow to achieve. Base software updates are difficult and expensive to apply if you have customised your system. Significant commitment is required, usually a 3 year initial term.
PaaS platforms
Pros - You can customise the system how you want if the base functionality isn't adequate or you want a competitive edge. Managed services for hosting in the cloud means your IT team has one less problem to worry about and it's scalable so you don't need to invest in hardware or services whenever business ramps up.
Cons - Custom development can be expensive and slow to achieve. Base software updates are difficult and expensive to apply if you have customised your system. Significant commitment is required, usually a 3 year initial term.
There are many application areas where SaaS systems can work for your business. Whether you are looking for solutions in Finance, ERP, E-Commerce, CRM or Digital Marketing, talk to it works!