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SaaS: Five Myths that Don't Hold Water
Is SaaS cheaper that on-premise software? Myth has it that SaaS is cheaper.Gartner says it really depends on your timeline for measurement. In a recent article, Gartner examines this and other myths around SaaS.
Myth 1 — SaaS is cheaper than on-premise.
During the first two years this is almost always true. But by five years, licensed on-premise software is often the better deal.
Myth 2 — SaaS can be implemented more quickly than on premise software
It depends on your situation. If you’re happy with the standard version of the software, that is normally true. In that case you’re up and running more quickly with SaaS. But if the software needs to be integrated with other systems or complex customizations are needed, there may be little difference in implementation timelines if you go with SaaS or with on-premise. Actually, the remote nature of SaaS may introduce latency and integration complexity that goes beyond what you need to cope with for on-premise implementations.
Myth 3 — SaaS is price like a utility model
This is almost never the case. Some Cloud-based infrastructure is sometimes priced on a per-hour or per-transaction usage, but most SaaS applications don’t follow that pricing model. SaaS cost is usually a subscription based on the number of user seats. Compared to on-premise licensing, SaaS usually has more flexibility in payment terms in adjusting the seat count up and down over time.
Myth 4 — SaaS can’t be integrated with on-premise software
Most SaaS applications offer a web service API that allows real-time data exchanges between applications. This allows SaaS applications to be integrated with other SaaS apps or on-premise applications. But security issues can increase the complexity of the integration.
Myth 5 — SaaS can really only handle very simple requirements
Again, there is no one answer. SaaS software tends to be more configurable and easier to use than traditional software. Many SaaS applications also target smaller companies that may not have as complex of requirements as larger companies. But there are many examples of complex SaaS installations.
