As a dedicated fund administration software vendor that services a diverse global client base, we are in the fortunate position to offer clients a multitude of implementation options to choose from when they consider adopting PFS-PAXUS, our ‘one-stop-shop’ complete fund administration system.
These options include full software as a service (SaaS), hosting services and in-house deployment, and we spend a lot of time discussing the pros and cons of each option to help the client positively identify, which is going to work best for their business, from both a short term and long-term viewpoint.
We have put together the following guide to help assist anyone who is pondering whether to buy or rent a solution and install it in-house versus utilising a fully hosted version and/or adopting a complete SaaS solution.
Businesses starting from scratch may not have servers, server rooms, software or a network administrator. These costs come with an on-premise solution which may mean that a cloud-based solution may be more attractive as there is no investment in hardware or the associated maintenance of that hardware.
However, if a business already has access to a server, server room and the other elements required for an on-premise software package, then the cost comparison becomes more complicated.
What is SaaS?
SaaS allows a company to rent or subscribe to a software product that is then accessed via a browser. In this situation, the business does not purchase the software outright and they do not have to buy the hardware and software needed to run the product, leading to a saving on the initial software cost.
All the user requires is a computer, a solid and reliable internet connection and a browser. SaaS, therefore, eliminates some of the other costs and hassle associated with on-premise software.
SaaS solutions are typically chosen by businesses that:
Have a reliable and fast internet connection
Require mobility and need to access the system from anywhere
Do not wish to invest in hardware and do not want to incur the associated costs of maintenance, backups, disaster recovery measures
Do not require direct access to the database for integration purposes
What is a hosted solution?
Hosting allows a business to buy or rent the required software product and ‘outsource’ the server and database, contracting with a specialist company and service provider to provide and maintain the hardware and software components needed to run the product.
This effectively alleviates the burden of having to look after a server yourself and shifts the associated costs and responsibilities to the chosen host and service provider.
Hosted solutions are typically chosen by businesses that:
No longer wish to own or look after their server(s)
Need to replace legacy or ageing servers
Determine that outsourcing their servers will be more cost effective overall
Prefer a regular monthly expense rather than incurring capital expenditure
Have a network of users in multiple locations with a poor internet or unreliable connection at the current server location
Are growing rapidly and need to be able to scale up quickly as the need arises
What are the main advantages of SaaS/hosting?
Lower cost of entry: The initial costs of adopting a system via a SaaS strategy costs far less than the comparative cost of procuring, licensing and deploying the solution in-house.
Lower total cost of ownership: With a subscription-based service, you do not have any capital costs, nor any operating and administration costs allowing for simpler budgeting and predictable monthly costs. There are no hefty maintenance costs when the software needs updating, and you don’t have to invest in or maintain any sort of infrastructure as it’s all taken care of by your service provider.
Faster time to market: When you choose a product that is offered as a SaaS, the platform has already been prepared, configured and implemented by the solution provider meaning that all the user needs to do is acquire their subscription and then log in—cutting down the time to market quite significantly.
Flexible/scalable pricing: You pay for only what you need and can scale up or down on-demand.
Ease of use: The service and your data are easily accessible, whether you are at home, in the office or travelling. All you need to access the software is a browser and an internet connection.
Highly secure: Security is on the top of the priority list for any SaaS solution provider ensuring that a reliable and secure infrastructure is in place, including everything from backup services to penetration testing.
Replicating this level of security with an in-house solution would be very complex and expensive.
Automatic upgrades: You will not have to download or install any patches and you automatically get all the latest features, software releases, updates and bug fixes, as the service provider will manage all updates and upgrades for you.
In summary, both SaaS and hosting make for a compelling argument—especially if cost is a primary consideration and if you want to get started as fast as possible. However, the most important element of all is to ensure that you select the right technology partner who understands your needs, your business and will be able to provide you with the software and the service to support your organisation today and tomorrow.
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