One of the fundamental decisions an organization has to make is to whether they should use locally hosted or cloud software.
Historically, companies reserved large portions of IT budgets for management software hosted in-house. But with more options, budget-savvy organizations are looking for more efficient and cost-effective alternatives to hosting their own software.
Moving to the Cloud
Traditional software has acquisition, maintenance, management and upgrade costs. Cloud software is hosted remotely and accessed, on-demand, via the Internet. Many enterprise-grade cloud applications are configurable and nearly all require minimal client involvement in terms of management.
Cloud-based software often eliminates a high percentage of the maintenance, management and upgrade costs. Choosing cloud software enables organizations to shift resources normally applied to management and maintenance of locally-installed, self-hosted and hard copy software to other more critical areas of operation. In addition, cloud software frequently offers a level of flexibility – in terms of accessibility, choice and dynamics – that traditional software has trouble keeping up with.
Hardware and Infrastructure Cost
The infrastructure required for locally installed or hosted software can require significant capital. If the software is server-based, as many powerful enterprise-grade applications are, the hardware and operating systems required to run an application can be tens of thousands of dollars. Even in the case of simple software that is locally installed on employees’ computers, larger hard drives, additional memory and more powerful processors may be required. Aside from the infrastructure required for reliable, high-speed internet access – which is a given for most organizations today – cloud software requires no special hardware or operating systems.
Staff and Overhead Impact
The costs of physical resources such as servers, network equipment, operating system licenses and workstation upgrades required for traditional, locally hosted or installed software are easy to see, the costs of staff and overhead required to keep everything running are not always as visible. If an organization has network or workstation resources dedicated to the hosting of traditional software, it also has highly-skilled, technical staff and overhead costs like electricity, security, climate control and crisis prevention dedicated to it.
Hindrance to Growth
As organizations grow and needs evolve, expensive traditional software and the costly infrastructure and overhead it requires, can be like dragging an anchor around. Deep investments often keep organizations tied to software and technology that no longer provides all of the capabilities they need. The thought of becoming even more deeply entrenched with additional costs and assets make organizations think twice about adding new capability or capacity.
Of course none of this is to say that there is no place at all for traditional software or that cloud software exists to answer every need. It should, however, bring to light the fact that there is more costs than just the purchase price to consider when choosing traditional software. Cloud software in addition to being a cost effective alternative, can eliminate the hindrance to growth as it constantly improved without additional upgrades. This keeps your company up-to-date with the latest software possible.