My ideas about Appliance-based Software Delivery (AbSD) vs. Software as a Service (SaaS) recently made the Tech Blog written by Brad Grimes and Joab Jackson in Government Computer News. Their blog referenced the white paper I wrote about the limitations of SaaS—including its questionable reliability, performance, security and high costs subject to increases over time, among other issues. Instead, I made the case for AbSD, especially for mid-market companies that can’t easily roll with the SaaS limitations without opening themselves up to big risks to their bottom line.
Grimes and Jackson rightfully take me to task about a couple of things that I didn’t elaborate on in the white paper — for one, that I didn’t give details about the actual cost savings AbSD affords over SaaS. The other is that using appliances, which requires adding hardware to your network, seems to fly in the face of the current trend toward IT consolidation. Since this blog is a forum for discussion, I can use it to give you a better picture of the savings in both overall cost and hardware use that AbSD offers.
In terms of the cost difference, it’s true that SaaS solutions may provide some volume discounts to the end-user as user counts grow, but over time, the discounts can’t compete with the affordability of the perpetual enterprise license of an appliance-based solution. The ongoing annual maintenance costs of an appliance solution turns out to be a fraction of the initial cost layout, which include maintenance of software and hardware, and technical support. SaaS costs will most likely stay flat or even increase over the initial year’s cost, so that by year two or three, the overall expense is far more than for the appliance.
And on the “appliances run counter to IT consolidation” myth, virtualization is a hot technology these days and many large enterprise companies are able to take advantage of it, employing VMware and other solutions to partition their servers for more efficient use. But maybe enterprise software caused the server proliferation problem in the first place? If enterprises bought more dedicated appliances, I think there might be less, not more, enterprise server bloat to deal with now.
As it stands, to reap the benefits of big-host server virtualization, a company has to have the resources—read: money, time and employees with the requisite skill set to understand, set up and maintain the technology. This isn’t a simple thing, and mid-market companies can’t afford complications like this in their IT infrastructure. You can’t get around the need for hardware to house your apps, so the benefits of a completely integrated hardware and software solution with end-to-end support offers the simplicity SMBs need.
In the long run, appliances are actually a more cost-effective solution than SaaS.
Grimes and Jackson are right, SaaS vendors can benefit by consolidating onto one platform. SaaS solution providers could offer both mid-market and enterprise customers an appliance-based bundle of their solution. Larger customers would benefit from the increased security, scalability and affordability of the same software solution being deployed on the appliance within their own LAN. SaaS centers could also achieve better load balancing and QoS levels. I think there are some great market opportunities for SaaS providers to partner with appliance vendors, who could provide the expertise and agility to move SaaS solutions into an AbSD model.
My take on AbSD is that it really is an intuitive, cost-effective and easy-to-use remedy to SaaS, especially for SMBs with limited resources who might find it hard to absorb those SaaS fee hikes (and yes, I’m convinced they’re coming). AbSD gives both the vendor and the end-user all the benefits people were hoping to get out of SaaS without the downside.
