3 Reasons Why We Are Reluctant to Sell “On Premises” Software Applications
The enterprise software applications are migrating to the Cloud. As a Commercial Off the Shelf software vendor, we are embracing this trend. We provide SaaS applications and Managed Hosting services. I firmly believe that, from a business perspective, Cloud deployment of enterprise software is critical for us to ultimately capture the value from technology innovation.
As a vendor, we are reluctant to sell On Premises applications (these are applications hosted by customers in their own IT environment). Here are the 3 key reasons:
- The IT team in customer organizations is often resource constrained. It is a challenge to work with them.
- It costs us more man hours (more expensive for customers) to configure the application to fit with the customers’ IT environment. Each customer has somewhat unique environment, so there is no scale economy here.
- It is bad customer experience when delay in application install, fixes, and updates caused by the 2 reasons above.
Innovation in web based software development tools (APIs, open source, etc) and cheaper off shore labor should reduce the costs of enterprise software applications. Software vendors can now provide better software products at a lower costs. But in order to deliver a good experience in deploying the software, we would love for our customers to embrace “Cloud” deployment. By doing that, they are truly enabling their internal business customers to enjoy the benefits of lower cost but more robust enterprise applications.