Maintenance Management – SaaS or Traditional Licensing Model
When searching for a maintenance management system (CMMS) it is easy to become confused and overawed with all the options and decisions you will encounter. This article will examine the pros and cons of SaaS and will help make at least one decision easier: Should we go with a licensed purchase or a Software as a Service (SaaS) subscription.
“In 2015, the worldwide market for SaaS software application sales was $33.4 billion dollars, with projections to grow more than double that to $67.2 billion by 2019”
Gartner: Market Trends: Future Look at SaaS in the Application Markets
The Software as a Service (SaaS) market has undergone significant changes and growth since the early 2000’s when it came to the fore as an alternative way to deliver software. There is a lot of confusion around what SaaS really is, how it compares to the traditional software licensing model and the link with cloud computing. To help you make a decision and understand the decision you make we will take a look at some of the facts around SaaS.
SaaS and the Cloud – What’s the Difference
To make it simple, SaaS is an alternative method for paying for software. It is a subscription that is set out for a specified period of time instead of the traditional model of paying a fee to own it indefinitely and 15 – 20% per year for upgrades and support.
Typically, a SaaS solution would be hosted in the cloud. This is not always the case and software can be installed locally, on your own servers, with a SaaS subscription. This would be done with an expiring licence and if you fail to renew the subscription and install a new key, the software will stop working.
Benefits of SaaS
Speed of Deployment
You will see a huge decrease in the amount of time needed before you see the benefit of the software, particularly with a cloud installation. The time spent on configuration and installation is greatly reduced and once agreements are reached you can have access to the new software in a matter of hours.
Lower Up-front Costs
You will avoid the expensive once off CapEx investment, instead, spreading the cost, typically over the first 3 – 5 years. Also, you can ensure you only pay for the resources you need, if you need to add more over time this can be done quickly and easily.
When going with SaaS and operating in the cloud you will avoid unnecessary maintenance and IT infrastructure costs that can hold a project back, run the latest, up to date software application on your vendor’s servers.
Straight Forward Procurement Process (Funding)
Many organisation divide funding into capital expenses (CAPEX) and operational expenses (OPEX). Many companies are choosing to avoid the formal procurement process of CAPEX funding, instead, spending money each year from the operational expenses (OPEX).
Less IT Resources
You won’t need to rely on your IT Department to install, upgrade and maintain your software. This will all be done by your provider and will be included in the subscription cost.
Arguably the greatest benefit of Software as a Service (SaaS) is that the application or system you are paying for can be scaled up or down based on your business needs. You will no longer pay for features, servers or capacity that you don’t need and won’t use. With SaaS, you are in control of what you pay for.
Upgrades with SaaS, particularly hosted on the cloud are quick, easy and cause minimum disruption to your business. With SaaS, you can ensure you are always on the latest version at no extra cost and without using any of your own manpower.
You must keep up Repayments
That’s right, as stated earlier in this article you are renting or paying a subscription for the software you use. If you do not meet recurring payment terms, the vendor is within their rights to disable your software package.
Cost over Time
With SaaS you pay a subscription fee and never own the software, this means over time SaaS can prove to be a more expensive option.
In 2016 Gartner predicted that over 50% of all new software deployments will be SaaS and in the cloud. This surge in growth will be driven by increasing vendor capabilities and rising consumer confidence.
Every organisation is different, the solution you choose needs to work for your organisation, strategy and budget. What we do know is that SaaS is here to stay and if it works for you, don’t be afraid to do something different.
If you would like to discuss which deployment model is most effective for you or hear about our CMMS: PEMAC Assets, please fill out the form below and a member of the PEMAC team will be in touch shortly.