Blog | March 16, 2010

SaaS vs. Hosted, Part 2: The User Experience

by Jody Vandergriff in Digital Asset Management, Marketing Operations

In one of our previous posts, we looked at some of the technical differences between a Software-as-a-Service (SaaS) model and a hosted solution for an application. Of course, the real world involves much more than just network architecture and software design. In this post, we’ll continue to compare differences between a SaaS application and a hosted solution; this time, though, we’ll take a closer look at how it impacts the users.

From a practical perspective, SaaS creates a service-oriented experience with dedicated teams that understand the software, hardware, and infrastructure needs of the application. Because the application’s design is built specifically for this model, support can be provided at all levels. On hosted solutions, the support team may have limited knowledge about the server and the architecture involved because all of that flows to an outside company. Similarly, SaaS software upgrades are instantaneous and experienced by all users at once because of the multi-tenant design. For hosted solutions, upgrading is often handled on a per-customer basis and the latest software version may require costly license upgrade fees.

Data availability is probably one of the most important priorities from a customer perspective. After all, if the customer can’t access the data, then it doesn’t matter what features come with the application. The SaaS model provides another benefit with its level of redundancy and backup. Multi-tenant architecture makes this all possible, and in general, customer data can be backed up in geographically distinct locations with a fail-over process and disaster-recovery plan in place. Hosted services depend on the actual hosting provider; in most cases, a single-server model is used without redundancy or frequent backup. An examination of reliability gives us the same picture: SaaS companies offer service-level guarantees or agreements (SLAs) that establish the customer’s standard for high availability. With the hosted solution, the same problem comes into play: since a third-party data center hosts the application, guarantees generally don’t fall into the domain of the application provider.

Hosted solutions and SaaS applications both have their spot in the marketplace. However, it’s important to know that just because a solution is hosted, it doesn’t necessarily offer the same scalability, reliability or functionality as a SaaS model. SaaS applications are built with the specific cloud infrastructure in mind, and because everyone is on the same page, fixes, updates, and support are all easier to provide. In short, it’s a more streamlined and efficient way to go, with fewer parties to deal with and a more dedicated focus from the provider. For these reasons, studies from groups such as Forrester Research cite SaaS as one of the key technology trends for business, both for now and for years to come.