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Pitfalls in On Premise ERP

On-premises software is one of the most common, traditional methods of using enterprise and consumer applications. It is a type of software delivery model that is installed and operated from a customer’s in-house server and computing infrastructure. This model is also known as shrink wrap.

On the other hand off-premise model is much newer approach for software development. This model is also known as SaaS (Software as a Service) or ‘Computing in Cloud’.

There are some pitfalls in on premise model over SaaS from consumer’s perspective.

Capital Expenditure: As on premise model is product based, the initial cost for purchasing the product is high because it is one time buy. As we know that the on premise model is installed or hosted in customer’s in house server, the initial server setup cost is there. Software licensing is an important part of this model. In SaaS model the customer need not worry about server setup cost and software licensing cost.

Ongoing Expenditure: When the product is ready to use there will be some expenditure in future due to maintenance. Depending upon the customer’s business model hardware infrastructure must be changed. If business grows fast then the hardware setup needs to be upgraded.

IT Expertise: A dedicated IT support staff is needed to maintain the server, security, application, storage and networking. When the application is hosted in cloud the customer don’t need any IT expertise.

Vendor Lock In: After buying the product customers have to use it whether they like it or not. At least for some period the customers bound to use the product because they already invested a lot in purchasing the product and software licensing. In case of SaaS customer need pay only for what they are using and when they are using.


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