Is SAAS, On-Premise or a Hybrid Approach Best For Your Business?

The fine line between Distribution and Manufacturing
April 13, 2021

Cloud based Software As A Service (SAAS) programs are priced under a monthly subscription model, typically with a one or more year commitment. While they offer the benefit of not needing an onsite server, they do mean all your staff will be dependent on getting reliable fast internet to effectively use the program. Be sure to ask about uptime, as you’ll be relying on your software vendor to ensure the program is accessible. While SAAS programs offer a lower up-front investment, they are not right for every company. With SAAS programs, your data is stored on the servers of the program provider. Sometimes, extracting that information should you wish to switch systems in the future can be a challenge. Many SAAS programs allow for minimal customization, so ensure the software satisfies your business needs, as is. Finally, SAAS programs often push program updates on their timeline, where feature menu locations or overall functionality can change from day to day, which can frustrate users who were not expecting changes. They offer the advantage of being browser based, but printing may be limited depending on the device the user accesses from. Perhaps you’ve heard that SAAS programs are ‘easy to join and difficult to get out of’.

On-Premise software programs are installed on a server at your business location (or one of your locations, if you have multiple sites). They are a good choice if you like to own your data, and be in control of access to it or if your available internet options are not ideal for supporting the needs for the number of users you have. If you want to connect plant floor equipment such as weigh scales, this is often more feasible through a local area network (LAN) within your facility; whereas many scale and other production equipment may not be designed to transmit information to a SAAS program. If you want the program configured to your processes or customized to ensure it meets your unique needs, an on-premise program could be your best choice. Offsite access is still possible for those working from home or connecting from offsite locations through a variety of apps that allow users to hop onto the server from various devices. Some companies run their ERP software on-premise, but set backups to save to the cloud, for off-site piece of mind.

A hybrid approach would see you contracting with an ‘infrastructure as a service’ (IAAS) provider like AWS (Amazon Web Service), Microsoft Azure, Oracle Cloud or a similar ‘server service’ offered by a smaller, local service provider. Local providers may used one of the big providers in the background or have their own data centre filled with servers. Some businesses, who enjoy good internet service, and who might be accustomed to using SAAS programs, prefer to not purchase an onsite server, making IAAS a good hybrid option to consider when moving up to an ERP program. It offers the advantage of not needing to invest in a server (like you would with the on-premise model), with the comfort of knowing you own your own data and control access to it (because it is NOT a SAAS program, simply an on-premise program you buy and license, but access on a cloud server that you control). Often these server services cost about $400-500 USD/month.

Program updates with Minotaur are accepted and made live on your timeline, with the option to do testing and training in a sandbox environment in advance of pushing any new features to users.

Onsite servers are often the least expensive long-term option (starting at $3,000 USD and up), and servers can last 5-8 years or more. Investing in a good server or ensuring a cloud provider dedicates enough RAM and processing speed to your company, is critical to providing the best program processing and screen refresh speed affecting the overall user experience.

Minotaur offers on-premise or hybrid deployment models, where you decide which model makes most sense for your business.

Compare Apples to Apples

When comparing options to determine the best software program fit and model of deployment for your business, a number of factors come into play. Ensuring the program itself can do what you need it to do, is most important. If it is not a step up from what you are using now, why change? Cost is another important factor. If you invest the time and money to switch programs, you want to be confident you’ll achieve meaningful business efficiency improvements and the advantages you went looking for. Training and service model is another key factor. Do your staff work best interacting by phone, by email, through remote support or are they comfortable submitting tickets with screen shots? How fast will support be offered when you need help. Compatibility in how you do business is important for growing companies. These are all important factors when choosing your software supplier.

When comparing cost of ownership of SAAS programs vs. On-Premise or Hybrid models, we recommend looking at about an 8 to 10 year timeline. For SAAS programs, be sure to ask about any minimum contract length, initial implementation, training and set up service fees, plus hardware requirements for the printers or computers you will use to access that program. Add to it any increased internet service costs, including ensuring you plan for a backup internet option, such as a cellular hub to keep on hand, since continual access to the internet will be required for your users to always have access to the program.

For on-premise programs, add the program cost, plus any annual license or maintenance fees, to the cost for any infrastructure upgrades you might need, such as a new server, with the database cost and implementation training and services.

On-Premise software providers often offer a monthly payment plan to allow you to spread the cost of the initial software license over time. Understand that that monthly price will often go DOWN, once the initial license fee is paid off, to reflect the fact that you then just be paying any ongoing annual license and maintenance fees.

Choosing the right software supplier for such an important part of your business (the program that manages all your business information) will help set you up to scale your company effectively, doing more with the people you have. At Minotaur, we aim to help make your growth easier!

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