SaaS vs On-Premise: Which solution is more profitable in terms of costs?

How to promote tour packages

Regiondo is a SaaS company, but what does it really mean? SaaS or “Software as a Service” is the opposite of SaaP – “Software as a product”, or just “on-premise”. But what is behind these designations? In this article, I will explain you both.

On-Premise/Self developing

On-Premise, also known as Software as a Product, is like the old fashioned way to buy or develop software. But most of the people are used to buy software in this way. A good example is The Microsoft Office package. A few years ago you had to buy a CD with the Microsoft Office programs or another license when you already installed the package. That means you just bought it one time and then you were free to use it how long you want to.

Software as a product means that you buy the software or a license once and then it is up to you. There is no hosting environment or live support. In some cases you also need own developer and staff to create and manage updates and upgrades

Also, you had to host it by yourself. So if your computer/servers crash – all your data was deleted unless a backup was made or you rent another server.

SaaS

A lot of SaaS provider came into our view in the last years. Netflix as a service provider for streaming is a very good example of it. So you pay your monthly fee and then the only thing you need is a (good) internet connection to enjoy the full service.

But there are more advantages than just to save money without driving to the next DVD Store. SaaS products are cloud-based like Regiondo. So you are not responsible for the hardware anymore and don’t have any investment needs for the technical infrastructure. This is the base for growth! You don’t need resources to extend or replace your hardware or software support. You can leave that to us!

Besides the fact that less technical knowledge is required you have the very important advantage of being flexible. Flexibility is nowadays important in different ways.

  1. You can test software before 
  2. Continual updates 
  3. Immediate bug fixes
  4. Live support 
  5. The costs are significant to your performance

And overall, a SaaS solution is able to adapt the changes in the market very quickly. Also, a SaaS solution has the network and the power to connect with big players like Viator to create the best benefits for the customers.

In the end, it is also interesting to mention that also Microsoft office is changing from an On-Premise to a SaaS product 😉

The total cost of ownership

Example: Regiondo Supplier “City Guides” with an advance package and 10.000 Tickets per year vs. on-premise self-hosted solution.

Cost

SaaS

On-Premise

Set-Up costs (developing)
The developer, selection processes

No

Yes

Upgrade / update costs
Development, update maintenance

No

Yes

Costs per booking
0,39€ – 0,49€ at Regiondo

Yes

Yes

Hardware replacements
On average every 3 years

No

Yes

Running costs:
Server Cost

Energy,

Service personnel

monthly fee/ license

No

No

No

Yes

Yes

Yes

Yes

Yes

 

Especially when you take a look at the running costs, you only have your low monthly fee. When you created your solution on-premise you have much more costs to manage. Like server costs, energy costs and additional staff like a product owner, system administrator, e-commerce analyst, designer etc. On top mutualized volumes allow Regiondo to negotiate the best payment terms with banks. Even if you choose the same payment provider, Regiondo can pass on better conditions to its customers.

Also, the costs for a SaaS solution behave linearly with your performance. For example, when your business is seasonal and you have to pass through low periods, the costs for a SaaS are very low and nearly not existing. This allows you to avoid unnecessary expenses and save your resources for tasks which are more important in this time like creating or calculating offers for your next season.

Example:

Supplier: A tour guide with about 10 000 tickets per year for 20€ each. The supplier chose the Advance Regiondo package for 99€ per month

The costs for set-up and running costs are based on requirements. We used an average in this example.

In this case, the Regiondo SaaS Solution saves you compared to the SaaP solution up to 32 148€ in 4 years. 

We did a calculation over 4 years to show you all differences between the costs of a SaaS solution and the on-premise version of it.

Comparison:


On-Premise products had their time before the internet was accessible to most of the people. But now you have very good advantages in case of a SaaS solution like Regiondo. We have thousands of customers. They are all very individual and have their special needs in the leisure industry. But all of them come together in our support channels. This situation creates the possibility for us to use the advantage of having a mutualized development. Know-how and features are developed for industry leaders and so for every customer from Regiondo.  

With our great Support and IT Team, we are adopting the special needs of the leisure market very quickly and implement it with a fundamental knowledge of the industry. Most of our employees are from the tourism or software industry so that we have built a great environment to develop our booking solution for you.

When you decide to choose a SaaS solution you are sure to be at least always online and have great support to suit the solution perfect for your business. Also, the time you save by choosing the SaaS solution is an important factor. Developing an own software solution with an own server environment is a long process with difficult decisions and patience. When you decide to choose the SaaS solution you are immediately ready to start your ticket shop.

The change from On-Premise to SaaS is like the change from a product orientation to a service orientation. You buy a whole solution, not only a product. With the great benefits of service, you create the chance to use the software even more successful and cover the negative eventualities at one stroke.

Interested? Book a demo with our experts or grab the chance and start a free trial just right now!

Try it for free!

 

About Alexander Bechte
Alex is Regiondo's Product Marketing Manager and passionate about traveling and digitalization. He is from Hamburg and studied tourism management in Munich. His aim is to inform you about the product side of Regiondo to improve your business!
All posts by Alexander Bechte

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