Let’s start off with a little quiz. SaaS is: A) a discount airline offering direct flights to Finland, B) a turbo charged automobile well suited for the German Autobahn, C) Software as a Service, D) not as good as the hype would have you believe. If you answered “C”, you get points for accuracy. If you answered “D”, you have passed the quiz with honors! (Don’t feel bad if you answered A or B)
Simply put, Software as a Service (SaaS) is a delivery method for software in which the applications are hosted by a third party, rather than reside on your servers. To access the software, you pay monthly subscriptions fees based on the number of users. At first glance, this model seems very attractive - no upfront software costs, fast implementation, no new hardware to purchase and maintain. But there are many critical factors to take into account if you are considering a SaaS solution.
Someone else will own YOUR financial data!
There is no getting around this fact – if a third party is hosting your ERP software, then your General Ledger, your payables, your confidential data is residing on a server owned by another company. Who truly owns the data? What happens to your data if that company goes bankrupt? These are risks you need to consider.
There are costs down the road
Sure, $60 a month per user sounds great when compared to $2,250 per user to purchase software, but make sure you are calculating the true cost. SaaS typically is on a named user basis; on premise ERP software like Microsoft
You still will have hardware to maintain
Many companies believe that SaaS will allow them to retire existing hardware. But a recent
In the end, you will probably find that an on premise installation of a robust ERP solution like