SaaS vs Hosted – What’s the difference and which is better suited for your company?

The terms SaaS and Hosted are thrown around interchangeably, so it’s no wonder people get confused and can’t tell them apart. But it’s important to recognize what they mean and their differences so that your business is able to choose the best option. If you are considering a CRM or any software implementation, you need to understand the different types of deployments and which one is right for you. SaaS is a business model whereas a platform provider sells access to it as an ongoing subscription. A good example of SaaS is Wix, that is highly convenient, but is lacking in ability to control and customize according to needs.  A hosted solution on the other hand is an open source platform that is installed and rented from a hosting company. You still have to pay for the hosting, but you have full control and customization of the platform.

In this blogpost we’re taking a more in-depth look at the different options and their pros and cons, so keep reading!

SaaS

SaaS (Software as a service) , or software on demand, is type of cloud service that provides software over internet. You simply create an account, purchase an ongoing subscription, and never have to worry about installing it on any device. Google, Twitter and Facebook are among a few examples of American Software as a Service, that users can access from any internet connected unit. Most of them have pay-as-you-go system but still includes completely free features or an appealing free trial. SaaS is often a great solution for companies and individuals that aren’t looking to invest in a pricey and complex software. It’s easy to use and simple, with immediate access and few updates.

Pros

  • Small chance of system failure
  • Initially cost efficient
  • User friendly and intuitive
  • Usually available on any device that is connected to internet
  • Doesn’t require updates.

Cons

  • Difficult to bring on premise
  • To take full advantage of the services you need to rework your existing applications. Your CRM system might for example not benefit unless both vendors are partners.
  • Running various applications in the cloud can end up costing more as each application have a cost of its own.

Hosted

Hosted operates on simple basics – and it means that you buy your software from a publisher or a Value-Added Reseller (VSR). It’s highly customizable according to needs and includes your own database. You have the software installed at data center or hosting center where physical or virtualized servers that you own, lease, or finance are set up. The solution is thereafter implemented like it would be on premise in the office. Hosted usually consists of a large upfront payment and has to be downloaded and installed on company servers. It also requires continuous monitoring and maintenance from the IT department. This is primarily useful in large corporations that have high security and confidentiality requirements such as government agencies. Hosted software’s are also updated on a regular basis, which may come to paralyze our work on occasions with coupled server failures, which fortunately rarely happens. The bright side here lies in that once the software is up to date, you can decide if you want to keep it or stick with the old version.

Pros

  • Your data is secured in a data center with consistent backups.
  • You own the software and only pay once beyond maintenance. If you should stop paying, the software will still work with your latest version
  • A range of features and customization options.
  • A better price for those that want to use it in the long term.

Cons

  • You can’t access your solution if you have internet failure
  • If you want to integrate other software with your presently hosted software, you need to get support and install at the hosting center.

SaaS vs Hosted

The competition between software as a Service and hosted has been the talk of the technology circles for a few years. We’ve seen the impactful benefits in different ways, with one being popular CRM applications like Salesforce. Confusion however still remains in what SaaS applications can do compared to hosted software. While they do have similarities, the distinct differences are important to recognize when choosing a provider One of the most obvious similarities is that they both are hosted off customer premise. But the difference is apparent in how hosted apps run on off premise servers but aren’t necessarily managed by the application provider. SaaS on the other hand, is built off premise, and integrated within the application developer’s IT infrastructure. The architecture also marks a distinction between the two, SaaS applications are accessed via Web portals and designed for a bigger customer base. This type of multi-tenant architecture is designed to run across the application’s entire user base and factors in scalability and performance so that a small business can experience the same quality as a big corporation.

Convenience or control?

A good example of when you’re met by having to choose between SaaS and hosted is when building a new website. When you decide to create a website for your new business, you’re met with a range of options. Two that may come to mind are Wix and WordPress. Wix is a SaaS Platform service provider that allows you to easy, and I mean easy, create a basic website. But it ends there. Wix is easy because it lacks a lot of the features that make CMS like WordPress so powerful. Wix allows you to choose between a bunch of themes, but compared to the selection from WordPress alone, theres no comparison. WordPress is also quite easy to manage but the initial setup requires some hefty work from your development and design team. In addition, Wix includes over 250 popular web apps, services and features to enhance your website. Most of the apps are free to use and mobile optimize and can be added by just a click. But WordPress includes an impressive 55,721 plugins to suit whatever type of solution your business needs.

The biggest advantage a SaaS platform has over Hosted is server maintenance that are consistently managed by the provider. This may come to be a double-edged sword for a hosted solution if your platform upgrade should break your current theme. You might be paralyzed in your work until a theme creator has time to fix it. Most hosted solutions will apply security upgrades, but it will be up to you to keep your CMS up to date.

Verdict

While both retain key spots in the marketplace, hosted doesn’t offer the same scalability and reliability, and functionality as SaaS. SaaS applications are built with cloud infrastructure in mind which means that updates and maintenance is easy to provide. SaaS is a much easier and effective way to go and includes fewer parties to deal with. But that said, you can also end up locked in a box with no way out, whereas with a hosted solution, you can create the website or solution you’ve always dreamed of. In addition, if you are looking for a secure and customized software to use for the long term, hosted software might be a better option.

By Sofia Svantesson
Brand Marketing Manager
"Unifying business communication and collaboration is key in streamlining workflow"

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