Gartner: An Honest Take on SaaS

It’s refreshing to see a major analytics firm like Gartner issuing a report about the hype that’s surrounded SaaS for years now.

Whether SaaS truly is more affordable than on-premise installations has been a debate that’s raged within the industry for years. As a former editor at CRM magazine, I remember covering the story from nearly every angle, with much of the data pointing towards enough users and time will mean any SaaS installation will eventually match an on-premise deployment in cost, and eventually exceed it.

Whether that’s the case I believe lies on a per installation basis; every business presents its own unique challenges and requirements. In the end, companies are going to pay for an application one way or another. With SaaS, the primary costs associated with TCO will come from subscription fees, which many estimate will comprise approximately 75 percent of the bill. With on-premise, subscription fees will be more evenly divided among infrastructure and installation costs. Determining which option will get you the most bang for your buck is key.

In years past, a company’s size was often used to determine which model to purchase, primarily because it was easy to figure out which type of CRM implementation was best. But with cloud computing, open source, and newer, more flexible models of SaaS that enable customization and integration with on-premise solutions, that’s no longer the case.

In the end, it comes down to two variables: what you’re planning to use your CRM system for and choice. Businesses grow and change, and with that, so do their IT requirements. Having a vendor(s) capable of meeting those evolving needs, whether that be hosted or installed, or both, is key.