Why CFOs are Bucking the SaaS Trend

The Software as a Service (Saas) trend has been steadily growing over the last decade. Interestingly, some companies that cloud computing is aimed at, small and medium-sized businesses, are now bucking the trend and instead favor on-premise software. The Software as a Service (Saas) trend has been steadily growing over the last decade. Interestingly, some companies that cloud computing is aimed at, small and medium-sized businesses, are now bucking the trend and instead favor on-premise software. This resistance comes in spite of the purported cost savings that come with its pay-as-you-go model and reduced maintenance costs.

In my conversations with CFOs, I have heard five key reasons some would rather invest in on-premise software. If you are weighing the benefits of the two types of systems, think through the following perceived disadvantages of SaaS and discuss them with any software consultant you are considering working with before deciding what is right for your business.

1. Competitive Advantage

There is a growing concern by CFOs that by using the same systems as their competitors, the uniqueness of their own company cannot be fully reflected and their true competitive advantages never realized.

2. Cost Control

In order to have better control over costs, some would rather handle changes and upgrades internally, along with the maintenance and testing that come with ensuring integrated systems work without a hitch.

3. Growth of DIY Clouds

Small and medium-sized businesses are now exploring setting up their own clouds with virtualization as it’s becoming more cost-effective. As technology has developed, it is now much easier to program a switch-over in the case of failure of the system or backups internally.

4. Painful Integration

Cost of integration of critical applications is perceived to be greater with SaaS than with an internal solution.

5. True TCO

Over time, CFOs believe the cost of SaaS is indeed expensive – so much so, that some say company growth is negligible because the cost of running a SaaS system never decreases over time.

There are indeed benefits to adopting a SaaS model. However, it’s important that you analyze your options carefully and decide whether or not it is the right choice for your company. Just because something is trendy doesn’t mean it’s right for you.

This resistance comes in spite of the purported cost savings that come with its pay-as-you-go model and reduced maintenance costs.

In my conversations with CFOs, I have heard five key reasons some would rather invest in on-premise software. If you are weighing the benefits of the two types of systems, think through the following perceived disadvantages of SaaS and discuss them with any software consultant you are considering working with before deciding what is right for your business.

1. Competitive Advantage

There is a growing concern by CFOs that by using the same systems as their competitors, the uniqueness of their own company cannot be fully reflected and their true competitive advantages never realized.

2. Cost Control

In order to have better control over costs, some would rather handle changes and upgrades internally, along with the maintenance and testing that come with ensuring integrated systems work without a hitch.

3. Growth of DIY Clouds

Small and medium-sized businesses are now exploring setting up their own clouds with virtualization as it’s becoming more cost-effective. As technology has developed, it is now much easier to program a switch-over in the case of failure of the system or backups internally.

4. Painful Integration

Cost of integration of critical applications is perceived to be greater with SaaS than with an internal solution.

5. True TCO

Over time, CFOs believe the cost of SaaS is indeed expensive – so much so, that some say company growth is negligible because the cost of running a SaaS system never decreases over time.

There are indeed benefits to adopting a SaaS model. However, it’s important that you analyze your options carefully and decide whether or not it is the right choice for your company. Just because something is trendy doesn’t mean it’s right for you.

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