With traditional software, customers buy a perpetual user license. This gives them the impression that they own the software and can use it in perpetuity. With SaaS instead of owning the software, customers pay for a subscription to software running on the infrastructure of the SaaS provider. The customers do not loose the right and ownership of data stored on the infrastructure of the SaaS vendor but they loose the right to use the software once they stop paying the subscription.

Below is an attempt towards the listing the parameters towards comparing SaaS with on-premise models:

  • Software: Eliminates the needs to buy software licenses, application servers, database servers
  • Hardware: Eliminates the needs to buy servers, network storage, backup systems etc.
  • No software / hardware replacement is required
  • Reduced spending on IT operations costs
  • No re-implementation costs
  • Reduced technology migration costs
  • SLA’s for ensuring superior operations
  • Faster time to value as there is no hardware/software to procure, installation and configuration

References