Tuesday, March 31, 2009

Software as a service is still misunderstood

Software as a service is an excellent option for IT and business units to pursue. Mark Everett Hall (Computerworld) gives a good overview including a view on when this on-demand approach falls short.

Research firm Gartner Inc. validates the view [that SaaS is cost-effective], with certain caveats. For example, if acquiring a packaged application wouldn't require hiring full-time workers or adding hardware, a subscription-based software service might not make long-term sense. Gartner advises users to estimate ongoing operational costs of a SaaS offering for at least three to five years and compare them with the projected investment in a packaged application for the same period, including depreciation on capital expenses. It's important to look at SaaS's long-term budget ramifications, even in these glum economic times, when short-term thinking can be tempting.

Also check out:

The 5 myths about SaaS


Four companies that swear by software as service tell why

"...If you are a start-up now and you are buying a server, you haven't really done your homework..."

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