Own or ‘Rent’ your Business Software? Software as a Service Vs. Software Ownership

18 Apr Own or ‘Rent’ your Business Software? Software as a Service Vs. Software Ownership

Salesforce.com is very proud of the fact that it is NOT software. In fact, the word “Software,” encircled by the red Ghostbusters circle and slash is its logo. But isn’t software a “good” thing? This leaves many people wondering… if it’s not software, then what is it?

Salesforce.com IS in fact a software application—it’s just not one that you buy or license. It’s one that you pay a fractional ongoing fee to use, also called “software-as-a-service,” or SaaS. This begs the question, why ‘rent’ software when you can just own it? It’s a good question, and one worth exploring further.

Cost:

Intricate software with lots of functionality costs a lot of money to develop. Teams of visionaries, programmers, project managers, database administrators, and countless others spend years developing some of the more complex software applications—hence the steep price. With SaaS, you pay monthly, quarterly, or yearly for the use of the software, and often only for the functionality that you use.

Updates:

Any good software will require updates. Times change, technology changes, and in the online world, this seems to happen at a very rapid pace. When you purchase software, you often get that version, and that’s it. You might get free or lower cost updates, but software companies would prefer to sell you the new version all over again. When using SaaS, you generally have access to updates because you are generally always plugged in to the latest version.

Speed:

SaaS applications are normally web based applications as opposed to those that you install on your computer or server. Web applications do tend to be a bit slower than desktop software and that can be annoying. Even with super high speed connections, there can be a bit of a lag.

Information ownership:

With any software, the functionality of the information is essentially tied to the tool itself. If you stop renting the Software-as-a-service, you lose the functionality of the data. You’ll likely be able to extract the data, but then will need to plug it in to some other software application should you decide to switch. The fact that the functionality of the information is dependent on the software is the same with any software that you may own; the difference is that you don’t continually pay monthly fees for the use of it though some software does include an annual licensing fee.