Software-as-a-Service (SaaS) VS In-House Software?
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Software-as-a-Service (SaaS) is something we encounter more and more frequently. In the last decade, the trend of investing in Information Technology (IT) in organizations began to lead to SaaS. Why is SaaS becoming an IT investment trend? Obviously, because SaaS offers advantages that are not offered in other software models.
The increasing number of SaaS providers also supports the trend of IT investment that leads to SaaS. In the previous period, the existing SaaS options were minimal and unattractive, so companies had to bleed to develop their own software to meet their business process needs. Today, with many SaaS options on offer, we can easily find the most appropriate software solutions to support an organization’s business processes.
What is SaaS? What advantages does a SaaS solution offer over in-house software? We will explain both in writing below.
Types of Software
By type, there are various types of software that companies sell. Two of them are
- Software that is sold and buyers can use the software by purchasing a license (traditional software), or
- Software that is not sold and buyers can use the software by subscription (SaaS).
The difference between traditional software and SaaS is that traditional software tends to be used by buyers without a specified time limit and can be modified by the buyer. In contrast, SaaS buyers can only use it for a predetermined duration and need to pay a subscription fee every month or year.
So what does this have to do with in-house software?
If from all the software available on the market, an organization feels that what the software company sells does not match the organization's needs, then the user can develop the software independently or modify the software he has purchased. Software development carried out by certain units or divisions in the organization is known as in-house software.
Learn more about SaaS, traditional software, and in-house software
SaaS is software provided by a cloud-based service provider company that clients can access via the internet. SaaS users only need to pay a fee in the form of a subscription fee, and then the software is ready for use. However, some SaaS providers charge a license fee to be paid by the user, who is valid for a predetermined duration of time. SaaS users do not need to think about maintenance issues, security risks, availability, training, and other problems with the software because they are all handled by the SaaS provider company.
Traditional software or in-house software that has been purchased or developed by the company needs to be deployed to a server, either on-premise or cloud so that the organization can use it. When it comes to both traditional and in-house software, there are still many things that the company needs to prepare. One of them is that companies need to prepare Information Technology (IT) experts in their IT division to carry out maintenance, oversee security, update software, and train existing software. Although clients can obtain these IT experts on an outsourcing basis from an outsourcing company, this has resulted in regular expenses that need to be paid by the company, which also requires supervision by the company.
Advantages of SaaS compared to In-House Software.
In the 21st century, more and more companies are moving from in-house and traditional software to SaaS. Why is that? In the section below, the author will explain the comparison between SaaS and in-house software.
Initial cost
Note: Both in-house and traditional software are considered the same thing by the author.
In short, if viewed from the cost, organizations using SaaS need to pay subscription fees only. Although several SaaS provider companies charge a license fee, both types of fees can be planned by the organization. On the other hand, organizations can plan only the cost of purchasing software or developing software for traditional software and in-house software. The organization cannot determine for sure any other costs such as (1) downtime, (2) training, (3) servers, (4) installation and configuration, and (5) license maintenance fees.
Implementation
The time needed for SaaS is relatively short compared to in-house software, which is relatively long. This is because SaaS is a ready-made solution that is ready for use by users.
Scalability
The scalability of SaaS can be adjusted quickly depending on user needs compared to in-house software.
Staffing
By using SaaS, organizations and companies need a minimum number of employees to monitor SaaS. This is different from the in-house software, which requires IT experts to handle the in-house software.
Features and functionality
The features offered by SaaS are limited; that is, SaaS only offers features provided by the SaaS provider company, while the features in the in-house software can be created and customized as much as possible according to the business processes of the organization or company. However, the features in SaaS meet the existing best practices.
Updates and security patches
Clients do not need to think about updates or security issues in SaaS because the SaaS provider company handles those issues. In contrast to in-house software, organizations and companies need to provide IT experts to deal with those issues.
Database management
Like updates and security patches, SaaS users do not need to think about problems with database management. On the other hand, organizations and companies that use in-house software need to provide IT experts for their database management.
Customization
SaaS is based on best practices that allow it to be adopted by all organizations and companies. SaaS customization is possible but based on an agreement between the SaaS provider company and the user. This differs from in-house software, which clients can customize as much as possible.
Business continuity
The business continuity of SaaS has been regulated by the SaaS provider company, while the company/organization regulates the business continuity of the in-house software as the user.
From the nine points above, here is a summary of the comparison of SaaS and in-house software:
You can learn more about SaaS Logistics and the features provided by Ritase by leaving your email address and telephone number on our web page or by sending an email to SaaS@ritase.com.
