The rise in popularity of the software-as-a-service (SaaS) delivery model has resulted in a number of assumptions about this emerging model, but it has been difficult for many companies to separate truth from fiction, according to Gartner Inc. Gartner analysts have examined the top-five assumptions to provide a bit of a reality check on the state of the SaaS industry.
"In recent years there has been a great deal of hype around SaaS," said Robert DeSisto, vice president and distinguished analyst at Gartner. "As a result, a great number of assumptions have been made by users, some positive, some negative, and some more accurate than others. The concern is that some companies are actually deploying SaaS solutions, based on these false assumptions."
Gartner has taken the top five assumptions that users make and provided a fact check on their accuracy.
Assumption 1 - SaaS is less expensive than on-premises software.
Fact Check: True during the first two years but may not be for a five-year TCO. SaaS applications will have lower total cost of ownership (TCO) for the first two years because SaaS applications do not require large capital investment for licenses or support infrastructure. However, in the third year and beyond, an on-premises deployment can become less expensive from an accounting perspective as the capital assets used for the on-premises deployment depreciate.
Assumption 2 - SaaS is faster to implement than on-premises software.
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