The Difference between Running Time Tracking Software On-premise versus in the Cloud

If you’ve been thinking about moving from an on-premise time tracking process to a cloud-based time tracking solution but haven’t been convinced to make the switch, consider this ― moving to the cloud can save your company millions over the long term.

Highlighting the distinctions

Cloud and legacy products and features may look the same on the surface, but their architectures are fundamentally different. Legacy vendors get their revenue from local installations, expensive licensing deals, big upfront investments, and hefty ongoing maintenance and consulting fees. Cloud-based vendors, on the other hand, have gained market share through multi-tenant architectures and monthly subscriptions.

So what does this mean for you?

With the traditional on-premise software model, each customer is forced to buy tens or hundreds of computers to run the software, whereas cloud vendors run their services with just a tiny fraction of the overall hardware and infrastructure legacy customers must buy ― and that means you save a bundle.

For instance, Forrester reports that $2.1 trillion will go into IT spend in 2013 ― and more than a significant chunk of this will be spent on network, infrastructure, and application outsourcing; computer hardware support services and maintenance; hosting; servers; and storage.

By implementing cloud technologies, you’ll not only save on hardware costs, but also on all the unnecessary installations, configurations, and software upgrades that on-premise set-ups require. In fact, Forrester noted that cloud-based solutions allow for a 90% reduction in operations and development personnel costs compared with on-premises installations.

Reap the full benefits of the cloud

In the hopes of tapping into the growing market for cloud services, many software vendors simply modify their applications so they can be accessed online and host the software themselves. However, without a multi-tenant architecture, they cannot deliver on the real promises of cloud computing.

With legacy employee time and attendance software, many customers are actually running different versions of the software. Upgrades to new product releases are done on a one-off basis, leaving most customers well short of the latest innovation or version. In contrast, cloud-based vendors seamlessly upgrade all users simultaneously so that everyone benefits from constant innovation — often introduced on a monthly, or even weekly, basis.

SaaS applications typically allow customers to license the software and support they want to use without installing or maintaining any software or hardware ― the vendor provides a service that can be subscribed to and accessed over the Internet, rather than a physical product that customers have to install and manage on their own at great expense.

Cloud-based solutions contribute more favorably to a company’s bottom line

Successful business executives are choosing these SaaS applications since they provide numerous strategic and financial benefits.

• Economies of scale: A true multi-tenant cloud system allows for quick deployment, hassle-free upgrades, lower cost, and faster innovations. It enables multiple customers to share one infrastructure in a highly secure environment. The collective investment of all the customers ensures that everyone shares a world-class global data center that is fully redundant, scalable, and secure, and is monitored 24x7x365 for high availability. Customers don’t have to invest in building the entire infrastructure and operations on their own. Seamless upgrades, updates, and minor releases are provided to customers automatically, and the cost distribution also allows SaaS vendors to charge customers a lower rate, returning the cost savings back to the customers.
• Predictable operational cost: SaaS vendors provide their services and enterprise-class software for a low monthly subscription fee, which is generally pay-as-you-go and requires no upfront investment. Typical annual hardware or software upgrade investments, on the other hand, are usually funded with new capital investments (CapEx), but this technology becomes outdated quickly and your investments start depreciating in value. It can become quite expensive when you get stuck in a spiral of throwing CapEx at a never-ending upgrade cycle. With SaaS, however, costly customizations are eliminated and upgrades are handled continuously and seamlessly by the vendor, not the customer, usually at no additional cost. Companies can then also account for these costs differently by opting to fund them from operating expenses (OpEx), which has the advantage of keeping financial statements and balance sheets lean.

Clearly, adopting cloud-based time tracking solutions will be critical to remaining competitive. In the long-run, paying for and managing the required licenses of legacy on-premise software or traditional hosted solutions can lead to long, burdensome, and expensive upgrade cycles and a lack of scalability. Instead, reap the full benefits of the cloud ― enjoy ease of use, productivity gains, scalability and, most importantly, the enormous cost savings that only a vendor-managed subscription-based model can provide.

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