Menu
Gartner: Don’t assume SaaS is cheaper

Gartner: Don’t assume SaaS is cheaper

IT managers should not assume that software-as-a-service is cheaper than on-premise software, Gartner has said.

The analyst house said there had been a "great deal of hype" around SaaS, and that businesses had misconceptions about its cost.

SaaS is cheaper during its first two years of use, Gartner said, but five year total cost of ownership would be lower for on-premise software. Part of this was from an accounting perspective, as the capital assets for on-premise software would depreciate.

Calling for businesses to have a "reality check" on SaaS, Gartner VP Robert DeSisto said: "The concern is that some companies are actually deploying SaaS solutions, based on these false assumptions."

In its report 'Fact-Checking: The Five Most-Common SaaS Assumptions', Gartner also warned that SaaS was not necessarily faster to implement. While vendors quote 30 days as the normal implementation time, some software still takes up to seven months, it said.

Businesses are equally wrong to assume they will be billed according to usage, Gartner said. In "the vast majority of cases", it explained, firms were pushed to sign pre-determined contracts with a fixed fee.

But companies also underestimated SaaS, the report stated. Many felt they could not integrate the software with on-premise applications or data sources, but data could be initially loaded to the SaaS application then updated regularly, or updated in real time using web services. Additionally, Gartner said, firms needed to remember that SaaS applications can be customised, and are no longer only for basic functions.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Software as a serviceinternational news

Events

Featured

Slideshows

Channel kicks 2021 into gear as After Hours returns to Auckland

Channel kicks 2021 into gear as After Hours returns to Auckland

After Hours made a welcome return to the channel social calendar with a bumper crowd of partners, distributors and vendors descending on The Pantry at Park Hyatt in Auckland to kick-start 2021.

Channel kicks 2021 into gear as After Hours returns to Auckland
The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

Hundreds of leaders from the New Zealand IT industry gathered at the Hilton in Auckland on 17 November to celebrate the finest female talent in the Kiwi channel and recognise the winners of the Reseller News Women in ICT Awards (WIICTA) 2020.

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards
Show Comments