7 reasons why SaaS can recession-proof your IT

How do you invest in business-improving IT when both CapEx and OpEx are squeezed? Dean Miles comes up with some suggestions.

17th September 2009 at 1:15 pm

No matter what businesses say in public, most are being squeezed by the downturn.  That squeeze often makes itself felt when it comes to investing in new IT or applications.

It’s no surprise that the CDW IT Monitor survey of IT spending in July 09 showed that just 21% of small businesses expect to grow their IT budgets in the next year.

Faced with stagnant revenues and tight credit, business owners are leaping at opportunities to cut their costs, by deferring software and hardware purchases and upgrades where possible.

The trick, of course, is not cutting so deeply that the business itself starts to suffer as a result.  The good news is, there is a way to avoid this squeeze, by using IT that is low-cost, needs minimal upfront investment or manpower-sapping management yet delivers business-enhancing applications.

Software as a Service (SaaS) or cloud applications can deliver these benefits.  Not merely for the potential cost savings, but also for the fact that they let organisations deploy enterprise-class applications quickly and easily.

Let’s take a closer look at the possible benefits.

Lower up-front costs

Instead of buying hardware and software and paying external parties to set up and run the applications, businesses simply rent the software they need on a per-user, per-month basis. This means costs are predictable, without a large bill before the application is even up and running.

Faster set up

SaaS gives businesses the ability to deploy and scale their applications up or down in hours, without having to reprogram, buy blocks of licenses, upgrade servers or end-user PCs.  It simply takes away the burdensome administration that usually goes hand-in-hand with new software roll-outs.

Reduced financial risk

Instead of having to swallow the cost of new software in one gulp, the investment is spread monthly with no deposit and no balloon payment at the end.  This cuts the financial risk out of IT planning because, if the business isn’t benefiting from a particular software module, it can simply stop using it, with zero penalty.

Lower capital expenditure

Because SaaS uses commodity hardware in large-scale data centres, businesses don’t have to invest in new servers or upgrades to existing machines themselves to benefit from cloud apps. The minimal hardware costs of using the application are factored into the overall monthly cost as part of the ‘utility pricing’ model.

Lower operating expenses

SaaS also frees IT administrators from much of the tedious manual provisioning and management of new applications, and handling upgrades to PCs to cope with those new apps. In addition, there should be no extra software support needed, as the SaaS vendor provides support for its apps.

Decreased downtime

SaaS means that new applications can be rolled out quickly without having to take hardware offline:  users typically point their web browsers at the cloud app and can get up and running. This means less disruption.  Also, cloud services are typically more robust, with less downtime than server-based software.  There’s also the added benefit that the apps can be accessed from anywhere – the office, from home, from a mobile device or web kiosk.  This is particularly important for smaller businesses, where flexible access is a boon.

Greener computing

SaaS is also a greener IT solution, helping companies using it to reduce their carbon footprint. If a firm is able to run just one less PC or server, it would typically save 145 kWh of electricity per year, equivalent to 105kg CO2** – as well as the costs of buying and running the computer.

So there are 7 good reasons why SaaS could help recession-proof your IT, and give your computing a boost.  Even though times are turbulent right now, businesses could be forgiven for having their heads in the cloud.

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Dean Miles


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