April 3, 2014 | Written by: Nathan Reid
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Adoption of software as a service (SaaS) is accelerating and many organizations are realizing the transformative benefits. A recent IBM study highlighted how leading organizations (Pacesetters) are leveraging SaaS deployments to unlock benefits such as reduced total cost of ownership (TCO), increased enterprise collaboration and enhanced market agility.
Enterprise software vendors are realizing that deployment choice is a key consideration for prospects and often are offering both cloud and on-premises versions of their software suites. When faced with the choice of cloud-based or on-premises software deployments, many purchasing organizations continue to struggle with this decision.
(Related: Top five advantages of software as a service (SaaS))
While there are many considerations when choosing to deploy through SaaS or on-premises, the following five points often resonate with clients and help guide their decision:
1. Focus = Success: Cloud deployments allow project teams to focus less on infrastructure and application delivery. Implementation teams can instead focus on business priorities and provide insight into the data, which is an aspect of enterprise implementations that is too often short-changed in a crunched project.
If your company has a mature IT team who have a history of successful service delivery, then an on-premises deployment may allow you equal focus and therefore an equal ability to succeed. Gauge your organization and its service delivery maturity to ensure your team can focus on delivering business value and will not get side-tracked with infrastructure and application delivery.
2. Previous adoption of cloud: In my experience, companies who are previous adopters of cloud-based SaaS solutions are much more likely to choose cloud-based deployments in their next projects. What is your company’s history of cloud adoption? Would you be breaking new ground if you chose a cloud deployment or simply followed in the path of previous internal cloud adopters? Understanding the road laid before you means that you can leverage existing lessons learned around technology and line-of-business and IT relationships.
3. Integration: Integration considerations can often influence the deployment method. Often this is because misconceptions around integration complexity in the cloud can steer companies away from trying. In truth, flexible integration options exist with most SaaS products to support both a wide variety of sources and connectivity methods.
Most companies have many regulatory and security obligations when transmitting data outside their network. Become knowledgeable about the data sources your project will require and understand the risk profile for that data along and your company’s data security requirements. Cloud vendors run highly secure operations and often have SSAE 16 (SAS 70) or similar audit controls to ensure your data is protected. Being knowledgeable about the data requirements for your projects is important for both on-premises and cloud deployments. Use this knowledge to help guide stakeholders to make the intelligent choice for the organization based on facts, not on misconceptions on data integration or security challenges.
4. Time to value: Cloud-based deployments reduce the overall implementation time of projects, allowing the business to realize value from the project sooner than traditional on-premises deployments. Since the majority of SaaS environments are provisioned by the vendor shortly after the contract signing, typical IT lead time is removed and the project team can begin implementing immediately. Ongoing management and operations of the cloud environments are also a responsibility of the vendor. SaaS vendors have dedicated cloud operations teams ready to assist on customer requests and often self-service tools exist for routine procedures. This streamlined delivery is often unique to cloud/SaaS deployments, unless of course your internal IT team has a very mature service delivery process. If your project is under a tight schedule then cloud-based deployments should be a major consideration. If, however, other gating factors are dictating your implementation cycles, on-premises deployment may allow your organization to realize an equal time-to-value benefit.
5. Flexible payment options: Many factors in your company’s financial situation can affect the decisions made about software purchases. With ever-tightening IT budgets, lower up-front costs are often a consideration for the purchasing organization. If this is your situation, a cloud-based SaaS solution and its subscription-based payment method is right for you. Look for vendors that offer flexible payment options for SaaS solutions. Leading vendors such as IBM provide options for monthly, quarterly or annual payment of SaaS fees. There are also circumstances when CAPEX outlay is preferred to lock-in annual budget (in these circumstances purchasing licenses up-front can be beneficial). Some vendors allow you to purchase traditional on-premises licenses and sign-up for SaaS delivery of your licences through a bring-your-own-license approach. Look for a vendor who is easy to do business with and offers a payment option that meets the needs of your business both today and in the future.
There are many factors to consider when choosing a deployment method and every situation is indeed unique. The majority of the organizations I help coach through the purchasing decision arrive in the buying cycle with a pre-determined bias towards a deployment choice through previous experiences and corporate culture. I hope the points provided above offer some aspects to consider during your next software purchasing cycle and help guide your decision to making the best choice to realize your business objectives.
Let me know your thoughts on this topic and any other considerations you think are valuable. Leave a message in the comments below. You personally can connect with me on Twitter @NateReid or on LinkedIn.