For and against SaaS and installed applications

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To SaaS or not to SaaS?

The mounting cost of installed applications and the complexity of their management has led many IT managers to move more of their applications to the cloud.

Software-as-a-Service (SaaS) has evolved rapidly over the past few years to deliver reliable and secure platforms that businesses can exploit. But SaaS is not a panacea, as installed applications can still be the best choice in some scenarios.

Gartner recently reported that 71% of organisations in 10 countries have been using SaaS for less than three years. According to its survey, investments in SaaS are expected to increase across all regions: 77% of respondents expected to increase spending, while 17% planned to keep it stable. 71% of European respondents intend to increase spending on SaaS.

But there has not been a wholesale move to SaaS based systems, as installed applications still have a lot to offer, not least of which is the perception that they are more secure than the cloud for sensitive data sets.

Making choices

For IT managers it is important to complete an evaluation process, which should reveal which of their systems would benefit from moving to a SaaS platform, and which should remain as installed applications.

SaaS platforms can provide a number of benefits, which include:

  • Low start-up costs, as the SaaS application is hosted on hardware systems your business does not have to purchase.
  • Infinite upgrades are possible. If a new feature is available this can be offered to users instantly via the cloud.
  • The potential for a high return on investment, as the initial outlay on SaaS platforms is lower than for installed applications.
  • Fewer financial resources are at risk with SaaS services. A business can use the free capital to develop other parts of the company.

Short subscription options are the norm, which means businesses are not locked into long term contracts for software upgrades they may not need.

Disadvantages of SaaS platforms include:

  • Businesses perceive a loss of control when using SaaS. As the application and data sets in use are not on their own servers, this can be a major concern.
  • A lack of robust security is still a problem for SaaS systems, even though this aspect of their deployment has been developed to offer high levels of security.
  • The SaaS system relies on a continuous connection to the internet. If this connection is disrupted, the service is disabled.
  • Some argue that applications such as HR or payroll are not suitable for use as a SaaS deployment.

On the other hand, installed applications can provide a number of advantages:

  • High levels of configurability enable a business to customise a system to exploit commercial opportunities.
  • Installed applications often mean that businesses develop their own processes, which can mean standard practices are adopted across a business based on the installed applications.
  • Owning the software encourages businesses to leverage all of its features to make the most of the investment that has been made.

However, there are potential downsides to installed applications:

  • They often need lengthy testing and implementation periods.
  • IT managers will spend a portion of their time troubleshooting these applications, especially when they are upgraded and suffer from unforeseen compatibility issues.
  • The cost of software licences can be prohibitive over the longer term.
  • From an IT manager's point of view we have not yet reached an either/or decision when it comes to installed applications or deployments using SaaS.

There are clearly advantages to moving some processes to the cloud. General office applications provide a good example: Google Docs and Microsoft Office 365 are showing businesses how these applications can benefit their companies if they are moved to a hosted environment.

Security concerns persist. For highly sensitive data the cloud offers too great a risk for many enterprises. Here, for example, installed applications one which IT managers can keep a close eye are still popular in the financial sector.

But the lines between these two approaches are becoming blurred. Many businesses are taking the best that both approaches can offer and developing hybrid systems for their enterprises, especially when legacy platforms and systems have to be taken into account.

Charles Eschinger, research vice president at Gartner concluded: "The decision to deploy SaaS based applications within an enterprise is dependent on the business criticality of the solution, as well as geography, business agility, usage scenario and IT architecture.

"Few organisations will completely migrate to SaaS. These organisations will live with a mix of SaaS and traditional on-premises application deployment models with a focus on integration and migration between different deployment models."