Does this situation sound familiar? You started out with an off-the-shelf accounting software package, but now your business has outgrown its many limitations. Or perhaps you purchased your accounting system many years ago and have decided it is time to find out more about the newer solutions on the market. Or, maybe, you’ve recently purchased a business management system, but it is not performing as promised or the cost of maintaining it is too high and you feel it is time to cut your losses. Or you are starting out a new business and want to assess your software solution options. All of these situations put you in the position of needing to research software on which to manage your entire business. Often, this is an overwhelming task for businesses.
When deciding to implement a new business management system, there are many factors that need to be considered. Up until the beginning of this century, choice of deployment options–the how and where of delivering a software solution–was NOT one of these considerations. You would purchase software licenses, buy computers, and install and run the application in your office. With advances in Web technologies and growth in broadband access to the Internet, alternative deployment methods have emerged. Nowadays, most evaluations of software alternatives include the question of whether to implement the solution “on-premises” or “on-demand” cloud computing options. The purpose of this paper is to assist you in better understanding these deployment options and how your choice in deployment can impact the overall success of your business management solution.
On-premises and on-demand defined
On-premises solutions are software installed and run on hardware on the premises of the customer. The customer is typically responsible for maintaining the technology infrastructure, and the software licenses are paid for up front through licensing fees. The customer has a perpetual license to use the software and is able to customize features and functionality within the software to suit the company’s unique requirements. In addition, the customer has complete control over the infrastructure and the data.
There are two common forms of on-demand software: software as a service (SaaS) and Hosted.
In a typical SaaS deployment, a vendor provides the application as a service that is licensed by multiple customers. All aspects of infrastructure management and application delivery are handled by the service provider. Delivery is typically over the public Internet. The customer typically does not maintain software or hardware and pays for access to the application on a pay-for-use or subscription basis. Some SaaS solutions can be deployed with your current on-premise software. These are often referred to as “connected services” as they connect to your current ERP software.
Hosted software is similar to software as a service in that it is managed by the vendor (or by a third party), accessed over the Internet, and paid for on a subscription basis, but the depth and breadth of the application’s functionality is often more comparable to that of the on-premises model, in part due to the only recent advances in technologies supporting SaaS and the relative newness of software publishers offering SaaS solutions.
At the end of day, deployment is a “how” and a “where” rather than a “what,” and competing business management solutions are separated by a broader range of considerations than just the choice between on-demand and on-premises. Additionally, the relative advantage or disadvantage of one deployment type over others is dependent on each company’s individual objectives and circumstances, which are likely to change over time and vary according to a number of criteria.
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