Demand for cloud-based applications is rapidly increasing in the office of Finance. If you're considering cloud products or services, you'll hear a lot of related terms tossed around that can easily be confusing.
Such is the case with the terms "cloud-based" and "SaaS". Both refer to software and/or related storage capacity that is in the cloud. And while most software vendors now claim to offer SaaS or cloud-based applications, not all of the deployment models are the same. You can hear what an industry analyst and one cloud customer have to say about this in the recent webinar Navigating the SaaS EPM Landscape.
Host applications involve the software vendor, or a third party, installing a traditional on-premises application in its own hardware infrastructure and hosting the application on behalf of the customer. Customers still have their own instance of the software, but it relieves them of the need to set up infrastructure and install the software themselves.
Hosted services offer numerous benefits to businesses, not the least of which is the cost savings over owning the data center and IT infrastructure. Other than that, a hosted solution works much like an on-premises software system, including licensing, configuration, maintenance, upgrades, etc. Of the three options listed here, hosted applications are the priciest.
With the single-tenant cloud model, the legacy software vendor sets up a cloud infrastructure and makes the application available to a number of customers, typically on a subscription basis. Customers are relieved of the infrastructure requirement, and they avoid the high up-front licensing associated with on-premises or hosted applications.
But since customers have their own “instance” set up in the cloud, the upgrade process is still painful and costly, and new releases aren’t rolled out automatically, or frequently. Also, in many cases, the features offered in the cloud version of the software are more limited than those available in the on-premises version.
Multi-tenant cloud applications are built from the start to be deployed on a shared infrastructure, with a single application code base being shared by a large number of customers. Because the infrastructure and software installation process is eliminated, applications can be provisioned and configured rapidly for new customers.
The software is sold on a subscription basis, so it removes the up-front licensing costs of on-premises or hosted applications. And since there’s a single code base, all customers are using the same version of the software, which is upgraded automatically, on a frequent basis, at no cost.
The multi-tenant model is model is typically the lowest-cost approach compared to single-tenant cloud and hosted applications. And this is what really matters when it comes to evaluating SaaS and cloud-based applications.
Learn More About Host Analytics
Demand for enterprise performance management (EPM) applications in the cloud has been increasing rapidly, and Host Analytics has been at the forefront of this trend since our inception. To learn more, download our free white paper titled "EPM in the Cloud."