25 Feb 2009

SaaS 'needs little capital investment'

Software-as-a-service (SaaS) is a low cost option for businesses, as the minimum number of user licences is low and it requires no capital investment.

Richard Bartlett, an IT consultant writing for CambridgeNetwork, says it is cheaper than traditional in-house services as it is priced on a per-user basis and so does not need a high initial investment.

Another advantage is the total cost of ownership being low, as maintenance and backup costs are dealt with by the supplier.

However, Mr Barlett says the only way to compare the cost of ownership between in-house services and SaaS is to compare it over a three-year period.

The option of hosted applications is ideal for start-up companies with five or less employees, he asserts, as it give the firm access to IT infrastructure without the initial set-up costs.

Industry firm NetworkedWorld recently stated that businesses can benefit from higher-quality IT systems and reduced budgets when adopting hosted services.