On today’s technology menu: SaaS

Using SaaS (Software-as-a-Service) is a little like ordering a la carte – and getting to pay by portion size. You get what you want, how you want it, when you want it. You can always order more in incremental amounts. And unlike in a restaurant, with SaaS, you can also send some back if you decide you ordered too much.

Are you paying for software you aren’t using?
When you license and install software in-house, every desktop – or even every user in many cases – must be licensed, whether the software is in use or not. In many models, your IT organization must engineer closer to a “worst-case scenario” – essentially, you have to get the biggest plate on the menu, just in case, and you can’t send anything back if you aren’t using it.

If your licenses are only 60% to 80% utilized, you’re still paying 100% – a cost that can really add up over several months. In several models, such as CTI licensing, 60% - 80% utilization can even look good, but this approach is not my preference. If you experience seasonal shifts or regular fluctuations in the size of your workforce, you have to pay for more licenses 365 days a year, even if those licenses will be unused for months at a time.

What’s needed is a more flexible solution, which is what you get with SaaS.

Consume only what you need
SaaS agreements are based on the number of current users. You and your provider establish a baseline for cost, and then month-to-month, the number of users can fluctuate. This means you can have 100 users one month, and 120 the next. Then you can drop back to 100, then down to 80, then back to 100.

On a monthly basis, SaaS allows you to achieve optimal pay-per-use situation, where you are paying for exactly what you need. This provides for excellent flexibility and very efficient use of your IT dollars.

–Michael Haines

Michael Haines is Chief Information Officer for CXO Global Solutions.