Software as a Service vs On-Premise Licensed Software


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In many ways, software as a service (SaaS) is nearly the polar opposite of on-premise licensed solutions. The differences between the two software business models highlights the differences between and our competition. In fact, the differences are so clearly drawn, we really don't consider software vendors our competition.

Our first priority is service, which includes software. Traditional software
vendors are concerned with sales, and then service.

The following table contrasts the differences between software sold as a service and the traditional on-premise licensed software.

Software as a Service On-Premise Software
"Turn key" start up Takes time, personnel and equipment for setup
No server hardware to purchase or maintain Must purchase and maintain server hardware
No speculation! No commitment! Requires long term planning and steep financial commitment
Amortized, pay as you go Requires large, up front capital investment
Software treated like a consumable commodity Sold as a tangible asset (although intangible and usually cannot be resold)
Ordinary operating expense Declared depreciable asset
We have a monthly incentive to support our software Once their sale is complete, incentive to support diminishes
Fosters long term, professional partnership Discourages customer contact without maintenance contract
Membership Patronage
We require satisfied members to sustain business They require new sales to sustain business
Service quickly responds to membership needs Longer, planned upgrade cycles
All upgrades included in the service Costly upgrades or maintenance contracts
Redundant equipment for fault tolerance Requires added equipment costs
Monitored server status Requires additional time, software and staffing
Monitored network security Requires additional time, software and staffing
Secure access by remote offices Requires additional network equipment
Real-time "live" software Single user or multi-user adaptations
Fully remote client software Web browser only or terminal server
Off-site backup facilities Tape or CD/DVD backup, or additional service
No physical access to servers or storage Hands-on access to equipment
Requires Internet connection Optional Internet connection (required for website hosting or remote connections)

Read more information here on the current trend toward Software as a Service.

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