SaaS, hosted or the cloud? Choosing the right solution for your company

For anyone who has ever worked with ERP systems, SaaS, hosted and the cloud are familiar terms. But there are many grey areas. That is why it is easy to confuse these terms and why it can be difficult to choose the right solution. So, the cloud, hosted, and SaaS—what does it all mean? What are the benefits of each solution? Let’s outline the definitions, benefits, and disadvantages. This will help you choose the right solution for your company.

SaaS (Software-as-a-Service)

SaaS is a method of software delivery. You can access data from any device with an internet connection and web browser. The software is written, maintained, and hosted by the software vendor. Most of the time, you purchase this solution on a rental basis because it is web-/HTML-based. The software vendor hosts and maintains the servers, databases, and the code. There are two varieties of SaaS. Vertical SaaS is a solution that focuses on the specific needs of the industry, for example rental or transport. Horizontal SaaS focuses on the needs of a specific role within the company, for example marketing, sales, or HR.

Benefits

SaaS is much cheaper because the vendor hosts multiple customers at the same time. This is especially beneficial for smaller companies. There is no need to worry about maintenance and security because the company that hosts the software takes care of this. Because of the multi-tenant character of this solution, the vendor tests and improves the system many times. This makes it a stable solution.

Disadvantages

One drawback to SaaS is that you do not have an indefinite license; you are dependent on your vendor. This means your vendor can raise the monthly costs or stop renting it out altogether. Even though it is cheaper in the short term, in the long run it can turn out to be more expensive For anyone who has ever worked with ERP systems, these are familiar terms. But there are many grey areas. That is why it is easy to confuse these terms and why it can be difficult to choose the right solution. So, the cloud, hosted, and SaaS—what does it all mean? What are the benefits of each solution? Let’s outline the definitions, benefits, and disadvantages. This will help you choose the right solution for your company.

Hosted software

Hosted software is written by your own developers or purchased from a vendor. Either way, you own the software. It is installed at a datacenter. You pay for the implementation, the hosting center, and a fee for the upgrades.

Benefits

Hosted software is flexible. Updates are possible whenever you need it. You control your data and the security. It is possible to tailor the solution to your company. You own the software, so when your contract ends, even though you can’t upgrade your software, you can still use it.

Disadvantages

Your solution is hosted in the cloud. This means that when you do not have internet, you do not have access to your system. The internet infrastructure has to be high-end for communication to run smoothly. It can be much more expensive than an SaaS solution.

Cloud application

A cloud application pulls components from multiple sources in order to form a completely separate software product. It does not run on just one server, but is scattered across multiple locations. Sometimes, the data is even spread over multiple servers.

Benefits

Transitioning is easy; you do not have to rewrite much to make your system work in the cloud. Data security is very strongly developed in the cloud. Upfront it can be very affordable because there is no need for a lot of rewriting or adjusting.

Disadvantages

It is not easy to bring cloud software on-premise because it is spread throughout the cloud. It is not easy to set up for end-users, so you are dependent on a software vendor. Costs can be steep because generally you do not pay per server, but per unit of data of CPU power cycles used.
Once you decide which deployment method is best for your business, it is easy to find a suitable vendor. However, if you try it the other way around by looking at vendors first, you can be overwhelmed by the number of choices. So, keep it simple: focus on which solution fits your organization goals. When you know that, then you can take the next step.

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