Software as a Service is attracting much attention from the market, but is SaaS really a better option than owning your own infrastructure?
Hosted software solutions such as Software as a Service (SaaS) are attracting much interest, especially for enterprise resource management (ERP) and customer relationship management (CRM) customers who are attracted to claims of cost savings and the ability to gain application services as a operational expense as opposed to hosting their own infrastructure. While hosted solutions make good sense in theory, close inspection reveals myriad potential problems for the approach that are often overlooked at first glance. There is also something to be said for owning your own infrastructure and maintaining full control thereof.
The immediate perceived advantage of the SaaS approach is in the rental model of payment whereby typically there is no upfront capital outlay and the service is paid for monthly over a lease period, with a positive effect on cash flow for the business. SaaS can also be turned on or off rapidly and there is usually no need to roll out complicated resource-hungry applications to desktop computers or buy expensive hardware and software for the server component that usually houses the shared database.
SaaS services can be accessed by anyone with Internet connectivity and a browser, from anywhere in the world and is increasingly being utilised from mobile devices. Technical resources at the organisation are also minimised because SaaS is driven by the third party company hosting the solution.
Pros and cons
When considering these advantages, hosted solutions look compelling and seem to make business sense, especially for small to medium sized enterprises – but while the advantages of SaaS are widely publicised, the disadvantages are seldom explored. For one, it’s possible to gain many of the advantages offered by SaaS without handing over to a third party what is likely to be one of the most valuable assets to your business other than the staff; your customer database. Most good ERP and CRM solutions allow you the flexibility of hosting your own solution with Web browser access or running it as a local application. Hosting your own solution and enabling it for web access has numerous benefits over the SaaS approach. For one, owning the software yourself allows you to do what you like with it. And only you have the power to turn it off.
Owning your own software also offers protection from the possible disaster that could occur should the SaaS hosting company goes out of business or decide to no longer support the service they’ve been providing you with.
It is also possible that the hosting company may go down for an indefinite period of time. Many of the SaaS hosting companies currently in the market host their infrastructure in California and have had some nasty scares recently when their servers shut down due to earthquakes. In terms of security one is also able to maintain a higher level of control over your own environment than that of an offshore company where you are unlikely to have any recourse to legal action to both prevent your data from being stolen or abused, or take action should this happen.
If a customer chooses to terminate their service with a SaaS provider they also stand to lose data stored on hosted systems. In some cases this could mean losing valuable databases, unless an agreement is in place that guarantees that this data will be handed over on termination of service. While a browser view of an application may be convenient, it is still limiting and may not suit organisational requirements, whereas a full-featured local application is almost certainly better suited to the task. It is also possible to make owned applications available via Web access should that be required.
In terms of the South African context, bandwidth and reliability of connections also pose problems for SaaS, which, in most cases, relies on Internet connectivity. Most SaaS solutions have also been developed in first-world countries where bandwidth is reliable and generally available in larger throughputs than locally. As a result, the same services deployed in South Africa perform dismally on local infrastructure. Also, should your Internet connection go down, you will also lose access to your application with the resulting impact on business.
It is not hard to see why the market is initially attracted to hosted application services, however when considering the broader impact of deploying SaaS it becomes clear that owned solutions will continue to provide a more sensible approach.
I remember, around the age of 10, really really wanting a diary for my birthday. This was the 80s, when having a diary was the height of sophistication. In fact, having a Filofax was the equivalent of having the latest, shiny, 64GB Wi-fi enabled iPad.
There was a lad in my class we called Filofax, because he was a nerd, and he had one. I remember it well, it had a colour-coded tab system, and he even had a map of the world at the front, just in case he got lost on his way to Blackpool from, erm, Malaysia.
But we didn’t need all of these bells and whistles because, as 10-year-olds in the 1980s, we didn’t have many ways of getting in touch with each other. There was our home phone, if we were ever allowed to use it, and our home address, for birthday cards and such. But beyond that… face-to-face or nothing.
Skip forward to today, and our multiple device, multiple contact method world has complicated things somewhat. The problem with your Filofax of old is that each contact has not only a home phone and an address, but also a mobile number, a work number, a twitter account, a facebook address, a Google Plus account (naw, I was only kidding), and multiple other ways of getting in touch.
And then, the main problem with the Filofax was that, as Filofax himself discovered, if you lose it, or if Fat Eddie the School Bully throws it into a dirty pool, you lose information. Information can be hard to get back.
Our customers are everywhere, and getting vital messages out to them is no longer a single-channel affair. While we may want to push our official messaging out through snail mail (for legal reasons), we still need to alert people through alternative channels such as SMS or e-mail, which means having that extended contact information available.
Less essential, but potentially more promotional material doesn’t have to go out through snail mail. Indeed, if it does, it often ends up in the bin. These softer-touch messages are better in softer-touch contact methods such as social media, where the approach is less aggressive.
So what does that mean for your modern contact management systems?
Well, not only do you require multiple contact methods within the same interface, you need the ability to bring them all together into one view. Knowing that a message has been dispatched through e-mail will influence the sending of the next message. Equally, knowing, for example, that tweets tend to get ignored by a certain client would influence your future contact strategy.
Secondly, you need to avoid the Filofax problem. That is, if you lose your data, how are you going to get it back? Cloud technology has solved this problem for most, but regular back-ups for on-premise software are a must.
Contact management is all about having crucial information at your fingertips. Customer Relationship Management is all about what you do with it…
By Mike Richardson, Managing Director EMEA
The top performing Sales representative from one of our Business Partners in South Africa sent over a few of his holiday photos last week. Looks like he has been enjoying some time getting back to nature and maybe a bit too up close and personal with a massive bull elephant! To be honest, outdoors and camping are not my preference; if I’m on vacation, I need the location to be at least as comfortable as the home I have left behind, knowing that I’m relatively safe and ideally with better weather than the UK.
Personal preference is obviously very important in a holiday selection, especially with the few days we all tend to get during a hectic year, and the costs involved. Additionally, things change; I may have been perfectly happy camping in rain and mud as a University student in my twenties, but as I hit mid-fifties, that World Cruise I never believed I could relate to suddenly becomes appealing.
In business, as with holidays, personal preference and the ability to change your preferences are extremely significant when selecting a product or service. Here at Maximizer, we currently get asked by numerous prospects and customers about different deployment options: cloud versus on-premise and whether purchasing software versus renting it via a service agreement is more cost effective. Businesses need to be comfortable in the decisions they take about how to deploy their line of business solutions and where they keep their customer data; after all, this information is how they manage their business.
A finance sector institution with highly confidential data may prefer to have their data installed on their own servers, whether this be on-site or in a ‘private cloud’(where they rent a dedicated hosted server for their own use only). Some companies will even have a hybrid of these two models for contingency planning and redundancy. However, your average start-up company providing consultancy services may be perfectly happy sharing a hosted platform with other businesses when they get started. Initially, they don’t require the infrastructure, resource or cash to go with the on-premise option. However, as the start-up company grows, maybe a move to a dedicated server to run other applications in the same environment with a level of integration is needed.
Invariably, the deployment of a solution tends to get muddled with the purchase methodology: pay up front with an annual top-up for Software Assurance is the traditional on-premise payment route, while a monthly fee with a minimum contract term is the usual method for a shared server hosted or cloud-based offering. However, the payment and deployment models don’t need to be so rigid. As with holidays, at Maximizer we recognise that different clients have different requirements and these requirements can change over time.
Because of how the Maximizer solution has been developed, we can offer flexible deployment options to ensure you benefit from the best of all worlds. As a client, you tell us how you would like to deploy your CRM Solution and how you would like to pay for it and we fit in with your requirements. If your needs change and you want to move from on-premise to hosted or vice versa, that’s not an issue for us: Maximizer CRM has the flexibility to cover your needs at any stage in your company’s development.