Software as a Service vs On-Premise Licensed Software
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From PlantX.net
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 PlantX.net 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.
