With thousands of new SaaS companies set up over the past couple of years, it would be easy to think that everyone will soon switch to Cloud based systems. However small to medium companies in particular are understandably wary of the risks of making such a significant change in communications. Derek Kay, Logistex Business Development Director, considers what SaaS can offer to the industry – as well as looking for the pitfalls.
“Buzzwords abound in IT today and the term SaaS – Software-as-a-Service – is the current buzzword in the Warehouse Management Systems (WMS) market. Companies galore are offering their own SaaS solutions, usually linked with Cloud-based delivery.
The Cloud concept means that the company’s WMS is hosted on the web, accessed through a traditional browser interface on the computer. Outside the WMS market, most current Cloud products are based on a single application running multiple systems for different customers, separating the data, as opposed to running individual web-based applications for each client user.
With an SaaS system clients simply rent the WMS of their choice, rather than incurring the capital expense and commitment of outright purchase. In today’s climate the option of avoiding capital expenditure is of course very appealing.
Although often spoken in the same breath, there is no real requirement for SaaS and Cloud models to be linked, though provision of an SaaS financing model does not depend on whether the WMS is hosted remotely on the web or in a client server configuration.
And perhaps here is where the possibly subjective fear is at its highest – Cloud computing means ultimately having sufficient confidence in the technology to no longer have a server on the premises.
The proponents of SaaS and Cloud make the point that by renting the service, users can benefit from automatic upgrades or improvements as they become available, without needing to review suppliers, systems and other options. WMS systems on the other hand have traditionally been purchased on a perpetual run time licence basis, with customisation as a capital expense. And in some unfortunate cases, a pay-per-user licence, so as the business grows – even if the operation remains unchanged – costs still rise.
However in the past few years WMS vendors have become more flexible about how they price their solutions and recover the cost of any bespoke development required.
Any reputable WMS supplier should be ready to offer monthly rental schemes, lease purchase or traditional capital purchase options, so the user can focus on selecting the most suitable solution rather than be restricted by how to pay.
This means that the prospective WMS buyer need not automatically opt for an SaaS rental solution just because it seems more palatable in the short term than a single larger capital investment. A purchased WMS should have a life of at least a decade by taking advantage of developments as they come to market (several Logistex customers are still operating WMSs installed more than 20 years ago). In contrast, a decade or more of rental payments will add up to a tidy sum.
I should not avoid mentioning too that Logistex’s LWS Reflex warehouse management software overcomes many of these limitations by providing a combination of low-cost entry and easy access to pre-installed features that the user can switch on and access at any time, as and when needed. This means that the software management system can grow and adapt organically to the business in years to come, perhaps from a simple manual operation to a fully automated warehouse, with no per user licence costs.
Each delivery method has its own benefits and limitations and the user should take time to consider all the options, and not be overly swayed by what seems to be a technological bandwagon.
Most forecasters see a bright future for both SaaS and Cloud systems and they may well be right. But for most businesses when to make the changes is as important as if, making sure you select the right technology, the right software and equally importantly the most competent and experienced suppliers.”
Logistex Enquiries to Derek Kay
Tel: 01536 480600