Why SaaS Appreciates Over Time

Buying on-premise software is like buying a new car.  When you first get it, you have the latest features, a brand new engine, top line performance, even that “new car smell.” However, it seems as soon as you drive it off the lot it starts to  depreciate:  wear and tear occurs and newer models roll out.  Remember when having a CD player in a car was all the rage? That is, until you needed a USB port to plug in your iPhone to access your music library.

On-premise software operates in a similar way.  At the time of deployment you have the latest features and functions  to meet your requirements. But what happens next?  Requirements change, new technology becomes available and infrastructure is taxed to the limit as organizations grow.  Traditional vendors will offer you a sneak peek at the next version. But unfortunately,  a costly and often time-consuming upgrade stand between you and the “next great thing.”

Software-as-a-Service (SaaS) completely changes this traditional model. Instead of a depreciating asset, SaaS is an investment that will actually appreciate over time.  Six months after deployment, a SaaS application will have more features and enhancements than when you purchased it, providing even more value than at the time of initial deployment.  How is this possible?

• No Customer Left Behind: The SaaS model takes traditional upgrades out of the equation and instead keeps all customers on the same version.  Companies no longer need to plan for major upgrades since they will always be on the latest application release at any given time.   Additionally, releases are delivered at a quicker pace, as often as once every few months, providing customers immediate access to the latest and greatest functions and features rather than waiting the standard 18-24 months for the next on-premise major version.

• Vendors Focus on Progress: Since there is only one version of the application, SaaS application development teams can focus their resources to improve that application instead of spending their time supporting older, legacy versions.  For example, an on-premise application on version 3 could very well need to support version 1 and 2 for an extended amount of time, in turn, exhausting resources to maintain and test older versions of the application rather than working on the newest set of functions and features.

• SaaS Infrastructure is Often Better than Yours: It’s a fact: SaaS vendors maintain or lease from world class data centers whose sole focus is  keeping infrastructure online to provide outstanding application performance. Data centers maintain excess infrastructure capacity and continuous equipment upgrades to provide the best possible platform. Likewise, with all the software componentry managed by the SaaS vendor, application performance falls squarely on the vendor. Traditional answers of “Maybe your database is not tuned” or “There is probably not enough memory on your application server” simply don’t compute in SaaS.

For these reasons, SaaS customers enjoy applications that continually add business value and perform better over time, allowing them to enjoy that ‘new car smell’ well into the future.

Eric Makovsky is the Director of Sales Consulting for Veeva Vault.