Steve Banker recently outlined the differences in how hardware and software are expensed. He put hardware in the context of a vehicle where over time, the value depreciated to a point where it is more economically viable to sell or repurpose it. In some instances of software, the same thing can happen. While an initial software purchase can provide near-immediate value (which is should), especially when rolling out a new initiative such as alternative workspace that affects many areas of the organization, how does that value change when factoring in maintenance costs, additional feature requirements, and the cost (in time, energy, and money) of upgrading the system.
What I found most interesting is that even when going through the cost/benefit analysis of software purchases, the conclusion is that software-as-a-service is the preferred method of software delivery. Why? First and foremost, there are no capital expenses associated with SaaS so any on-demand purchases doesn't affect the balance sheet. Further, the costs of upgrading is minimal - if any - because those costs are included in the agreement. And as Banker contends, "From a budgeting perspective, this strikes me as much cleaner."
In my experience, the implementation costs associated with a behind-the-firewall solution are always higher than those of a SaaS application. There is simply more to do. You will either pay consultants or use your own valuable resources and time to worry about installing software, integrating it, building servers, configuration, etc.
Posted by: nahrungsergänzung | December 11, 2009 at 02:23 AM