SaaS vs On-Premise Energy Management Software
If your job includes managing energy data, either for controlling power production or energy consumption, there’s 90% chance that you are struggling – or at least have struggled – with the integration and organization of your data. Doing that in a good or bad way since the beginning, can affect your business for many years.
Asset managers, O&M companies or even energy suppliers have two choices: they can develop their own on-premise software, or they can rely on third party’s platforms, that typically work in a Saas (software as a service) manner.
Both choices have their pro and cons, it really depends on what are your business needs and goals for the long run.
However, in a phase in which it’s difficult to integrate new technologies and business models – like in the energy industry right now – we suggest that system reliability and integration are the key elements that allow companies to keep the pace of innovation and satisfy growing customers’ needs. In particular, we think that there are 5 main reasons why Saas solutions might be better than on-premise custom software:
1. Lower cost of entry
With SaaS, you pay for what you need, without having to buy hardware to host your new applications. Instead of provisioning internal resources to install the software, the vendor provides APIs and performs much of the work to get their software working for you. The time to a working solution can drop from months in the traditional model to weeks, days or hours with the SaaS model.
2. Reduced time to benefit/rapid prototyping
In the SaaS model, the software application is already installed and configured. Users can provision the server for the cloud and quickly have the application ready for use. This cuts the time to benefit and allows to immediatly benefit from it without long wait times or steep learning curves.
A SaaS approach to energy management, where you can collect all your data, offers more capabilities and fewer headaches than having to control different energy management systems at the same time.
Plus, your energy needs are likely to shift over time and your SaaS software can adapt along with it. For example it allows software suppliers to provide their customers access to new tools that have been shaped by tens of thousands of users’ needs.
Another key difference between Cloud and on-premise solutions is how they are priced. While there are many exceptions to this rule, in general, Cloud software is priced under a monthly or annual subscription basis including costs for support and updates, with the only additional fees being training.
On-premise software is generally priced under a one-time perpetual license fee (usually based on the size of the organisation or the number of concurrent users). There are recurring fees for support, updates and training. But what many companies forget to consider is the Total Cost of Ownership (TCO) of their on-premise software investment, including hardware, network, backup and development systems.
5. The SaaS vendor is responsible for upgrades, uptime and security
Under the SaaS model, since the software is hosted by the vendor, they take on the responsibility for maintaining the software and upgrading it, ensuring that it is reliable and meeting agreed-upon service level agreements, and keeping the application and its data secure.
SaaS software is a solution growing in popularity in the energy sector and has become an increasingly viable business option in the last few years. Suppliers take care of them for you and roll out regular software updates, whilst offering you the highest levels of security.
These benefits are now available with cloud-based energy management tools and having everything in one place is the ultimate key to managing and running a successful business.
This is the one of a series of articles, where we take a look at how energy companies can boost their performances through digital energy. In this series we will discuss:
- New revenue opportunities in the digital energy era
- Main struggles with energy monitoring and management software
- Vertical all in one solutions Vs. Building your own energy software