Software Delivery Models and Technology Trends
Graphic: http://www.esi.mil/saas_toolkit/pricing_models.html
- How do you think the delivery model is going to affect any new developments in technology?
The delivery models, on-premise and Saas, will affect new technology developments in several ways, which will in turn, be a boon for the consumer; consumers of technology will have many more options available to them than they ever had with the original, older delivery model of on-premise.
Developers and manufacturers of on-premise software will be forced by new market pressure from Saas providers, to take what they do best, and do it even better, in order to stay competitive. For example, on-premise software is has the reputation for being more secure than the cloud, so providers will need to separate themselves from competing on-premise providers by excelling in and focusing on security. Likewise, they are known for customizing and targeting software exactly to their customers specific requirements. In the future, this needs to, not only continue, but improve, perhaps by providing superior customer support after the initial sale. In addition, on-premise software is not known to have frequent or inexpensive upgrades available because of this customization level. Again, to stay competitive, they will need to convince their customers they will be providing up to date upgrades in a timely manner and at a competitive price.
Saas providers will be taking what they already do well and taking it to the next level; more modern usability interfaces, providing a superior user experience that requires little up front training and staying of the leading edge of new tech developments and maintain the agility to provide their customers access to them.
In terms of integration with other systems that organizations use, Saas could stand to improve in this area. Therefore, new developments for Saas technology will include improved integrations capabilities with other systems, for example other ERPs.
Pricing over the long term seems to be about the same between teh two delivery models. Obviously there is higher up front cost with on-premise, but over time, say 5 years or so, the total costs roughly equal subscription costs for Saas systems. I'm sure this varies widely; by software type, industry, and many other variables, but if I had to predict predict the impact of Saas availability on cost; I would anticipate that on-premise software providers will have to consider changing their pricing model. It may be difficult for them to compete with Saas low buy-in cost and more consistent year to year cost.
Developers and manufacturers of on-premise software will be forced by new market pressure from Saas providers, to take what they do best, and do it even better, in order to stay competitive. For example, on-premise software is has the reputation for being more secure than the cloud, so providers will need to separate themselves from competing on-premise providers by excelling in and focusing on security. Likewise, they are known for customizing and targeting software exactly to their customers specific requirements. In the future, this needs to, not only continue, but improve, perhaps by providing superior customer support after the initial sale. In addition, on-premise software is not known to have frequent or inexpensive upgrades available because of this customization level. Again, to stay competitive, they will need to convince their customers they will be providing up to date upgrades in a timely manner and at a competitive price.
Saas providers will be taking what they already do well and taking it to the next level; more modern usability interfaces, providing a superior user experience that requires little up front training and staying of the leading edge of new tech developments and maintain the agility to provide their customers access to them.
In terms of integration with other systems that organizations use, Saas could stand to improve in this area. Therefore, new developments for Saas technology will include improved integrations capabilities with other systems, for example other ERPs.
Pricing over the long term seems to be about the same between teh two delivery models. Obviously there is higher up front cost with on-premise, but over time, say 5 years or so, the total costs roughly equal subscription costs for Saas systems. I'm sure this varies widely; by software type, industry, and many other variables, but if I had to predict predict the impact of Saas availability on cost; I would anticipate that on-premise software providers will have to consider changing their pricing model. It may be difficult for them to compete with Saas low buy-in cost and more consistent year to year cost.
- What do you think of the future of on-premise technology?
It will likely never completely go away, because it does serve certain purposes and it is highly customizable. They may be certain very high security industries such as government agencies and healthcare that will always use some on p-premise technology.
Here are some facts from William Blair & Company, 2007:
Here are some facts from William Blair & Company, 2007:
- 25% of new business delivered via SaaS by 2011, up from 5% in 2005
- Aberdeen: 70% of 631 companies surveyed are looking at or planing to use SaaS
- In your opinion, what delivery model will be able to respond better to the three trends of social, mobile, and global?
Saas will come out ahead here. Social, mobile and global trends have one thing in common and that is they change frequently. SaaS software many not cost less over all than on-premise, but:
- Saas can be implemented more quickly
- Saas facilitates more frequent improvements and releases
- Saas facilitates a better understanding of the customer/user.
- How will the trends of social, mobile, and global translate itself to HR software? In other words, can you provide an example of how these three trends can benefits HR departments now and in the future?
One of the biggest and most obvious impacts will be on Talent Acquisition. Social and mobile recruiting will be the way of the future for sure. Talent Acquisition departments need to have the agility and software required to provide a candidate experience via mobile devices.
Total Reward Departments, as well and Learning and Development, will be transformed by global requirements. Industry training regulations, Quality standards, and benefits programs will all need to be tailored by region and country. Organizations will need powerful and nimble technology to keep pace with all these individualized requirements and reporting standards. Reports will need to be prepared accurately and quickly. Saas technology will provide the nimbleness and on-premise software will probably be needed for the short term future to provide the security requirements needed. Additionally, Saas systems may not work as well in countries that are not yet consistent in their network capabilities.
Even areas such as engagement will take advantage of social and mobile trends. The way we communicated with our friends and family - this can be mirrored with internal social networks that are accessed by mobile devices. Inexpensive mobile devices may even be provided to first line, entry level manufacturing employees, who may not otherwise have access to mobile. One example of this I have seen (but not used myself) is Beekeeper.
Even areas such as engagement will take advantage of social and mobile trends. The way we communicated with our friends and family - this can be mirrored with internal social networks that are accessed by mobile devices. Inexpensive mobile devices may even be provided to first line, entry level manufacturing employees, who may not otherwise have access to mobile. One example of this I have seen (but not used myself) is Beekeeper.
Well said..
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