SaaS vs. Hosted; what's the difference?


Knowing the difference between ‘Software as a system’ and a ‘Hosted’ service will help assist in the deciding factor on which one is right for your organization’s functionality. There is no one-model-fits-all. Before deciding on which system is right for the business, you must decide whether or not the company is at the right stage to consider an entire implementation. Therefore, a thorough evaluation of the infrastructure of the company must be considered. The current needs, in terms of technology should be involved, as well as, a medium to long term growth plan. Is the business capable of supporting a secure, available, and reliable application themselves? Or is it better to partner with a third party provider? This article will help you compare the differences in each application, along with outlining the benefits and important features each application has to offer.

The most obvious difference between the two applications is that one is a product which you buy, and the other is a service that you use.

Hosted Applications are used by companies with more generic business requirements including website hosting, email servers, off-site backups, and data warehousing. Essentially, users connect to a hosted service by a direct network connection, which may or may not be, by way of the internet. The hosted software runs on an off-premise server and offices use it in the same way as if they were accessing an in-house server. The software is installed at a data centre or ‘hosting centre’ where you either own, lease, or finance either physical or virtual servers which may not be managed by the provider.

Benefits of a Hosted Applications:

  • You essentially own the software.

  • Reliability & Security. Data is in a very secure data centre, especially when it comes to disaster recovery.

  • You are still able to bring your application back in house down the road with little interruption.

Disadvantages of a Hosted Application System:

  • Software upgrades, including up-to-date features and functionality may not be affordable to the organization at the time the upgrades are released.

  • Large upfront software payment.

Software-as-a-Service (SaaS) aka the Cloud provides a feature-rich experience and is a method used to deliver software data that is accessed through any device equipped with internet access. SaaS is frequently sold using a subscription type model. Customers will pay an ongoing fee depending on the use of the application or service(s) needed; this will vary from customer to customer. The SaaS provider hosts the application centrally and continually deploys all upgrades and minor issues as required, which then delivers access and functionality to all end users. Providers may also include tools that allow the customer to modify workflow and other aspects of the application.

Benefits of Using SaaS:

  • Cost effective. Upfront costs are reduced due to the fact that you are paying for the applications as you use them. The time and capital is also reduced in the initial implementation of the system, within your company.

  • Very secure and safe as far as security goes. Most vendors undergo security procedures such as SAS70 Type II audits, which tests the level of security the data centre encompasses. Most secure providers will have integrated identity management that has centralized control and provides each user with a single login.

  • The system is always upgraded to the latest versions of the software without your company having to do a thing. Not to mention, maintenance and repairs are never an issue for your business or IT department.

  • No need to install more servers or more apps on more devices. All information can be accessed through any computer, laptop, tablet, or smartphone.

Disadvantages to Using a SaaS Model:

  • The primary downside to SaaS is it relies on a good internet connection, due to the fact that it is accessed strictly through the web.

  • They are still examining more viable ways in handle the complexity and requirements to support large enterprise corporations.

The key to choosing between a Hosted and SaaS applications is ensuring you understand what your organization’s needs are, and which solution can best address those terms presently and into the future. You will feel more comfortable if you know your provider is a strong, viable and stable company, that has been in business a good while, and can be expected to be around for long term. To help you decide which solution is right for your business’s need, feel free to contact us.

#SaaS #Hosted #LicensedApplications #PEO #ProfessionalServices #GPSPartnersInc #GPSP

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