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Benefits of SaaS vs. Traditional Licences

Benefits of SaaS vs. Traditional Licences

For many businesses, the adoption of cloud-hosted services is no longer a question, cloud provisioning is an accepted fact. As a result, Software as a Service (SaaS) has grown enormously and is now adopted widely, even at enterprise level. That said, some businesses are still operating via the traditional licencing model.

The reason for the shift to the cloud and Software as a Service is simple: the benefits of the SaaS model greatly outweigh the disadvantages. We’ve written this article to remind readers that adopting SaaS was the right choice, and to encourage businesses operating a traditional model to finally make the switch.

 

The difference between SaaS and traditional licencing

SaaS and traditional licencing

To re-iterate, traditional licencing models involve paying a one-off sum to purchase a licence to use a specific version of a software product, typically into perpetuity. The business holding the license will be responsible for buying and maintaining the computing equipment that hosts the software and could be required to pay top-up licence fees whenever a new edition of a software product is released.

Software as a Service, in contrast, involves a rental payment, typically made monthly. In return, the client has access to the latest edition of a software product, hosted on the provider’s service, for as long as the rental payment is made. Hardware and infrastructure costs are handled by the SaaS vendor and upgrades are inclusive and are rolled out automatically.

 

Why is SaaS so popular with users of software products?

SaaS Popular

Whether it’s individuals, businesses or indeed enterprise, the appeal of SaaS has been universal. In fact, despite increasing saturation of the market, Gartner is still predicting 17.3% growth in public cloud revenue through 2019. The reason for this popularity lies in the clear, inarguable benefits. So, what are these benefits? Let’s take a look:

Accessibility. By nature, SaaS is provisioned in the cloud which, in turn, means that users can access their software solutions from any location. Yes, correctly set up VPNs can enable users to access software hosted locally as well, but SaaS removes the need for secure gateways and tedious networks configurations. Instead, SaaS solutions are accessible from anywhere by default.

Flexibility and scalability. Under the traditional licencing model, businesses can struggle to quickly ramp up technology provisioning, as doing so involves steep fees and the purchase of additional on-site equipment. In contrast, SaaS vendors have the scale to rapidly accommodate additional requirements, as long as the client is willing to pay additional monthly fees.

Upgrades are managed. A mix of high upgrade licence fees, the cost of support staff installing updates and the downtime involved can mean that keeping a software solution up to date under the traditional licencing model becomes costly, very quickly. In contrast, SaaS vendors roll out updates automatically, free of charge.

Staying at the cutting edge. Because SaaS vendors roll out updates automatically, there is less likelihood that your business will get stuck using out of date tech and out of date business processes. Adapting to frequently applied updates can be painful, but SaaS solutions do ensure that businesses never fall dramatically behind technology trends.

Reduced IT overhead. SaaS vendors take responsibility for a wide range of IT tasks, including the maintenance of infrastructure and control over application security. Particularly where businesses deploy small or non-existent IT teams, delegating IT overheads to a SaaS vendor can be highly beneficial.

SaaS and budgeting. Traditional licencing carries high up-front costs which can make IT budgeting difficult. Though businesses can budget for the capex requirements of traditional software licences, the flexible nature of SaaS allows businesses to budget for monthly fees instead. SaaS also simplifies matters in fluctuating workforces, as redundant licences can be swiftly reduced. By comparison, traditional licencing plans can leave businesses with wasted expenditure.

 

Drawbacks of using SaaS instead of traditional licensing

SaaS Drawbacks

Technology revolutions always involve a degree of pushback, and it is not just a resistance to change. Though the benefits of SaaS are inarguable, there are some drawbacks. First, some businesses may find that the total cost of ownership of a SaaS solution is higher than paying up-front for software licences, alongside the hardware to host the software.

Next, the continuous upgrade cycle of SaaS vendors can cause frustration with users unless users are continually briefed and trained. Businesses can also find that SaaS solutions change so rapidly that these no longer effectively meet the needs of a business. In contrast, under a traditional licencing model, a business could decline to purchase future upgrades, at least for a period.

 

Switching is inevitable

We’ve outlined why SaaS solutions are beneficial to the vast majority of business clients. The benefits of SaaS solutions explain why only a small number of businesses are sticking to a traditional licencing model.

However, the impetus to switch is also carried by the fact that many software vendors are effectively abandoning traditional licencing models, in tune with the overall inertia of the switch to cloud computing. Businesses still using traditional licensing models should seriously consider switching to SaaS wherever practical, rather than wait until they are forced to do so.

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