What does SaaS mean? SaaS stands for the acronym “Software as a Service” in the software industry. Think of it like renting your business premises versus buying it. Why do you think so many businesses use rental spaces rather than buy actual real estate for their business? Hold on to that thought for a minute.
What does an on-premise solution mean? On-Premise servers, business software, and computers (on-prem) on the other hand are owned and operated by each individual business. This is like buying your business premises instead of renting it.
The simple difference between SaaS and on-premise is that, for SaaS, servers and business software are located off-site from its client’s or owner’s business while for on-prem, these things are hosted within the business premises.
In most instances, SaaS is accessed via a web browser, and or mobile app via an Internet connection and purchased on a subscription basis and incur a monthly or yearly charge. Often, the only hardware you need is a computer or laptop, tablet, or smartphone. Overall, SaaS depends on cloud infrastructure, which simply means, the servers are hosted off-site. For on-prem, you need to host your hardware and software in-house and usually supported by a third-party vendor.
There are benefits to both options. The purpose of this article is to help micro, small and medium-sized enterprises (MSMEs) business owners better understand why SaaS is a better choice today.
SaaS offers seamless mobile deployment meaning it’s easy to move your hardware as long as you have an Internet connection and freedom from bulky equipment. Especially for retail traders, you do not have to put up what you see in supermarkets cashier desks.
So, when should you consider SaaS? Here is when:
- From a cost perspective, when you want licensing and support fees bundled together and would prefer to spread your costs in small amounts payable monthly or yearly.
- In terms of testing the software, when you want free or discounted trial periods with a click without any additional IT infrastructure.
- In terms of IT skills, if you do not have inhouse staff to support your technology, for implementation (or installation), and year-over-year maintenance.
- If you believe that your data will be safe and secure with the online cloud provider you choose as well as data backup and recovery.
- If you are not always at your business premises and want to be connected to your business system on the go.
- If you like predictable billing for your business technology needs and not ad-hoc bills that may be randomly changed by IT support professionals every time you make a support call.
One thing is for sure though, the future of software is going to be significantly cloud-based and SaaS is really something that MSMEs should opt into in order to start saving on capital expenditure associated with technology acquisition.
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By Dr. Dorcas Muthoni, CEO/Founder, OpenBusiness Africa