So how Saasy can I get?
So what’s all this Saas (‘software as a service’) fuss about? In short, Cloud technology enables you to ‘only fork out dollars for the time you actually spend using your hardware or software’. I’ll take you through two Cloud concepts that will give your business immediate cost savings.
Unless you are actually running your own hosting business then it’s time to ask yourself why pay for perpetual server costs, software, licences, and upgrades. Wouldn’t it make more sense to just pay for servers and software while you’re actually using it? By the time you have switched off your computer you like to think that you are no longer paying for usage right? Many of you are probably still hanging onto wanting your own server under complete control of your magic fingers and not recognizing that it’s actually serving up more time and money.
“Software as a service” is applications that is hosted and maintained by a supplier. For example, I’ll assume that you: have a service provider that is hosting your website and email; word processor to create quotes or invoices; you email quotes and invoices to your clients; and you use spread sheet software to keep track of your expenses or costs. If you are one step further then you’ve also invested in a good business application or package that helps you with these sales and accounting tasks. So to set this all up you’re running a PC/server that serves your applications, hosts your mail clients, and performs your daily backups (you might have also invested in some external backup drives). You’re paying yearly licencing fees with some added hardware and software support, maintenance and upgrades costs.
Two types of cloud offerings will immediately reduce your costs: ‘infrastructure as a service’ (Iaas) means a supplier is hosting your servers; and ‘software as a service’ (Saas) means a supplier is hosting your software or business applications. Let’s take our previous example and step through the process of Iaas and Saas. Firstly, in order to run your website, host your email server, and perform backups you’ll need a basic server and storage per month; you can get this hosted for FREE (assuming you only need entry level specs) through some of the mainstream cloud suppliers (email me if need more information). Beyond that basic need the typical Iaas costs is usage based (you only pay for what you use) and works out to be at least half of what you are paying for those capabilities today (see sample cost breakdown later). Secondly, (this is where you will see significant cost savings) you can run all your business applications as a service (Saas). In our example you pay a supplier to run your business applications and you only pay for what you use. So invest in a business application that helps you create quotes and invoices, send emails to clients, send and receive payments, and does your accounting and find a supplier to host it for you.
I’ll put some money where my mouth is. I have put together a three year mini infrastructure budget relative to our case study (the two budget models exclude fixed costs that are relevant in both scenarios).
Non-cloud hardware/software cost/budget:
- Hosting: 120$/year (website including multi-user email server)
- PC/Server: 500$/year period (tax depreciation applied)
- Business Applications: 500$/year (a reasonable business invoicing solution) for 2 users
- Other applications: 150$/year (Word processor, spread sheet, email client and upgraded at least once) for 2 users
- Maintenance costs: 100$/year (includes basic PC/Server support and upgrade services)
Total: 4110$ (over a 3 year period)
Cloud hardware/software cost/budget
- Hosting: 0$/year (website including multi-user email server)
- PC/Server: 0$/year period (tax depreciation subtracted)
- Business Applications: 42$/month hosted business solution (a reasonable business invoicing solution) for 5 users
- Other applications: 0$/year (Word processor, spread sheet, email client and upgraded at least once) for 2 users
- Maintenance costs: 50$/year (Saas setup and ongoing support)
Total: 1662$ (over a 3 year period)
As a small business these costs reductions not only extend to your operational costs but also have risk advantages (data backups in a data centre secured across regions is very safe and secure) along with carbon foot print benefits and savings (hardware, electricity, paper).