Economic and Strategic Benefits of Cloud Computing

Whitepaper

Published February 2021

cloud_computing

Does SaaS save money? Traditional vendors of IT products and services sometimes argue that systems deployed on-premises are more cost-effective over the long run than their cloud-based counterparts. They claim that while licensed software may have higher acquisition costs, they are amortised over a fixed time period in contrast to Software-as-a-Service or SaaS, subscription fees, which continue for the life of the offering in the form of recurring per-user fees.

Cloud providers, on the other hand, argue that the upfront savings are significant and that, in any event, the real benefits of SaaS are not in direct cost savings but in the strategic advantages that the cloud brings to the organisation.

Which side is correct? The answer is not an academic exercise. For organisations to make intelligent decisions regarding the cloud, it is important to understand the relative costs of SaaS vs. on-premises systems.