For many years, the only way to deploy a document management solution was to purchase software licenses to run on internal servers. Companies would then allocate existing resources or hire additional technical staff to administer the system, backup data, and troubleshoot problems. Then, when the hardware and software approached obsolescence, companies would re-invest in these assets through periodic upgrades.
Cloud-based (or “SaaS”) solutions now offer a very different model, which in many cases have proven to be more affordable, or at least more flexible. In a SaaS pricing structure, a company typically pays a monthly fee, in effect, leasing the application and data storage space as opposed to owning and maintaining hardware and software in-house.
System use is paid as a recurring operating cost — similar to electricity or phone service — rather than as a depreciating asset. The cloud solution vendor takes over the responsibility of operating servers and backing up data — and periodic upgrades of both hardware and software are included as part of the “service.”
Whether one model costs more than the other over the lifetime of the system depends on the business situation. What is clear is that the subscription model now lowers – or even eliminates — the barrier for entry. As a result, companies with limited budgets that would have prevented them from deploying an on-premise solution can now choose a cloud-based service to gain the benefits of previously inaccessible “enterprise solutions” for document and business process management.
More established businesses — those already invested in on-premise servers and software – might also employ the subscription-based model as a viable alternative to purchasing additional on-premise software licenses or upgrading servers and associated system and network software and hardware.
In the new M-Files white paper, Document Management in the Cloud: Storing and Organizing Files and Records in a Hosted Environment, we discuss how cloud solutions not only represent a significant shift in how businesses store and access their digital content, but also how they pay for it. In a cloud-based subscription model, most or all of the expenses associated with storage, management, maintenance and support are included in one monthly fee, and only a fraction of the ongoing operational resources are required for maintaining hardware and software necessary with on-premise alternatives.
