From time to time, we discuss ways businesses can take advantage of cloud technology. We’ve provided examples in the past of ways that cloud-based technologies improve employee productivity. We’ve also given an example of a local business that has successfully moved its entire business to the cloud. Moving an entire business to the cloud is not realistic for every business. If you are ready to explore the benefits of the cloud, a good place to start may be with software hosting.
I think most readers would agree: IT is not your passion. You don’t care how it works, but rather, you care that it delivers tangible results to your organization. There are three terms you must be familiar with to understand the concept of software or application hosting.
The first term is “self-hosted” or “on premise.” When an organization self-hosts software, the organization takes complete responsibility for the solution. Think about your accounting software for a moment. If you purchased server hardware, purchased accounting software licenses, had the software vendor install THEIR software on YOUR servers, and you have an internal IT staff or outsourced provider that is managing its maintenance, backups, and disaster recovery activities, your accounting software is likely a self-hosted or on-premise solution.
The second term is Software-As-A-Service or SaaS. If you pay a monthly or annual subscription fee that permits you to use a software product that you don’t own licenses for and that someone else services and maintains, you may be acquiring software via SaaS. If you’ve ever used a third party marketing tool like MailChimp or Constant Contact that charges you a monthly fee to use their software online, you’ve been leveraging SaaS. In this case, you own no hardware. You own no software licenses. You have nothing to maintain. You pay a recurring fee to the software vendor who manages everything on your behalf. You pay these fee for as long as you use the software.
The third term is software (or application) hosting. Hosting is a mix of on-premise and SaaS. In this model, you buy the required software licenses for the software you wish you use. Unlike an on-premise solution, however, you do not pay for any up-front hardware nor do you bear the responsibility of maintaining the software installation, hardware maintenance, backups or disaster recovery responsibilities.
Software hosting offers several advantages over on-premise solutions:
Lower Up-Front Investment:
First, there’s a lower up-front investment. While you do have to purchase your software licenses, you do not have to purchase the server hardware or related network equipment needed to operate the software. This can equate to thousands of dollars, depending on the solution you are deploying.
Second, the solution is scalable. This means it can grow (or even shrink) with you. Let’s say you have 15 employees today. You purchase an on-premise line of business application. One year from now you have experienced tremendous growth and add 20 additional employees. Chances are the hardware you purchased for your system just one year ago will not adequately support your team now that it has grown so significantly. You’ll have to upgrade it, and you will incur the up-front expense of that. If you are hosting, however, you simply purchase the additional software licenses you need for your new staff, and your hosting provider will take care of the rest.
No Hardware to Maintain:
Another benefit is you have no hardware to maintain. You are no stranger to IT downtime. Equipment failure happen. If you have an on-premise system, and there’s a hardware failure, your IT team is responsible for fixing it. They also bear the responsibility of maintaining it. This means making sure that it’s performing optimally, that software and operating system upgrades are efficiently deployed, and any associated databases are properly optimized so they run efficiently. When you host your software, you offload all that responsibility. Your hosting provider takes over these time consuming, but necessary tasks.
Better Security and Data Protection:
Fourth, and yet perhaps among the most important advantage, is that hosting your software provides your practice with better security and data protection (provided you choose an adequate host, that is). If you are self-hosting your software, you must make certain it is secure, that it’s backed up properly and those backups are tested regularly. That’s a big job. You might be surprised how often it’s neglected. Just as you offload maintenance requirements when hosting with a third-party provider, you also offload security and protection of your data to a third party when hosting your software.
Anytime, Anywhere Access:
One last benefit of hosting software is anytime, anywhere access to your system. Let’s face it, the days of doing work only when you are AT work are behind us. Work is no longer where we are but what we do, and for most of us, we don’t just work in our office. Hosting your software applications enables you to securely access your system from anywhere you choose to work, regardless of the time of day you choose to do so provided you have an internet connection.
A Word of Caution:
I’d remiss if I didn’t share with you two disadvantages associated with hosting your software applications. Hosting is not for every business. If you are in an area where internet speeds and reliability is an issue, you do NOT want to host your software applications. In a hosting environment, you must be connected to the internet to access your system. If you frequently experience internet outages or reliability issues, hosting your applications will be a miserable experience. Second, you should consider the types of files you frequently access. If you are accessing large files (such as video, large images, etc) on a mediocre internet connection, you may experience latency, or lag, in retrieving those files. This will impact your productivity and may be a deal breaker. You must examine your situation closely before becoming 100% dedicated to a hosted solution.