Much like individuals who are questioning whether to rent or buy in a fluctuating real estate market, many organizations today are weighing similar options in a rapidly changing technology market. Does it make sense to buy, or to choose software-as-a-service (SaaS), a model that lets you pay a service fee for use of the product?

The Pros

In light of decreasing technology budgets, a per-seat subscription base price for software makes it easier to know and allocate costs for different departments or business units. Updates and upgrades are easier and faster, too. Instead of downloading and installing them yourself, the SaaS provider does it for you. Add to the mix the ease of tapping into the cloud for applications, and the scale starts to tip in favor of SaaS. But before rushing to this solution, let’s consider the flip-side.

The Cons

There’s a one-size-fits-all approach with SaaS solutions that assumes your business runs like everyone else’s. For example, since many solutions are built on a multi-tenant architecture, customers share the same applications. So, when new functionality is rolled out, it’s rolled out to everyone. You may be forced to change your business process to what the functionality supports, even if it is not a good change for you.

Additionally, many of the newly developed SaaS applications lack maturity. It takes years for software to mature and include all the features and functions required to run a business. Many of the newer SaaS software solutions are missing key pieces of functionality, such as localizations that support global operations.

Also consider that there may be multiple SaaS solutions in place around your organization. You might find your HR, finance and sales applications have different SaaS solutions from different vendors, and each runs on a different platform. Since none of them run on the same technology, the integration can be very expensive and the lack of integration can be detrimental to your day-to-day business operations.

Conclusion

If you have made long-term investments in other applications, before switching to a SaaS model, think about those investments from a licensing standpoint. The right choice may be an upgrade to increase the value. And check out the new releases. If there are functional gaps between your existing applications, there may be features within the current software or new releases to fill them. Or, it might make sense to explore another application to fill that gap, but be aware that raises integration issues again.

AT&T can help you integrate a wide variety of applications, host them in our world class data centers and provide full application lifecycle management, so you can have mature ERP applications offered in a subscription per-seat model.

Is SaaS a good solution for your organization? Hopefully, now that you know the advantages and disadvantages of choosing this option, you can make the right decision for your business.