In the World of Enterprise Software, simply selecting a solution based on whether or not it satisfies all your requirements is just the start. Enterprise software solutions are selected based on their longevity – making the seller more a partner than just another vendor. And with those considerations comes the understanding as to where the software should be hosted, too. In fact, you should know whether or not you’re in the market for a hosted solution or an internally deployed solution before ever beginning your evaluation.
There will always be considerations for how and where your chosen software is deployed. These will stem from two very specific questions; questions which should be answered prior to beginning your evaluation…
- Do we purchase the software outright and host it internally? This is what’s known as a Capital Expense or “Cap-Ex”.
- Do we purchase a subscription of the software whereby the vendor hosts it for us? This is what’s known as an Operational Expense or “Op-Ex”.
Of course, there are a number of factors at play when making these decisions. Those factors being…
- Will IT / IS be involved in this evaluation and deployment?
- Do we have the infrastructure in place to support the software?
- Are we budgeted for higher cost of application and lower maintenance and support costs in the out years? Or are we budgeted for a more consistent, year-over-year cost?
Often times clients will ask me to provide them with costing for both – Cloud versus Internally Hosted. The expectation being that one will be less expensive than the other and thus the “cheaper” solution would be the one they choose. Regardless, both products are priced according to the value they represent. With this in mind, if the above questions are clearly answered, “cheaper” doesn’t play a part in the decision. When that’s true, cost comparison is only being done competitively across the different vendors providing similar solutions.
The value in a Software as a Service, or a “Cloud” model, is in the ‘Service’ – as the acronym would suggest. There’s a great deal of value provided in what a service provider brings to the table. Guaranteed up-times, infrastructure relief, reduction in resources; all of which carry with them a great deal of value – both monetarily and in peace of mind.
Before you begin your next enterprise software evaluation, be sure to answer that ever important question! Do we want a Cloud-Based application, or an internally Hosted application? Answer that and you’re able to focus entirely on the evaluation of technology.
About Shane Yerkes
Shane is a creative, entrepreneurial-minded sales executive with a focus on start-up and growth based software companies. With a consistent track record of exceeding revenue targets, He attributes his success to a very simple business philosophy; Solve real business problems through the solution, never sell for what's not there. Google+