In the previous post, we looked at what impact a disruption in your software vendor's business can have. In this final post of this series, we'll touch on the issue of pricing and more.
Pricing
Pricing will obviously depend a lot on the particular application or applications you are looking at, regardless of how they are hosted, such as how the pricing model works, when payments are made, what rights you have for use of the application, how support is handled, and so on. But there are some particular areas that you'll want to pay particular attention to.
Many vendor-hosted applications will be priced in terms of a "subscription", for example a monthly fee paid for use of the system, sometimes with a one-time setup fee, but no other fees for things like upgrades. Often there are several different "plans" that you can choose from, offering different features of usage limits, and you can often move up or down between different plans. Make sure that you understand the limits each particular plan offers; is it based on registered users, amount of access, number of documents? Pay careful attention to any limits on disk storage and bandwidth. Because these are shared between many users, it's often in the vendor's interest to put a cap on these; ensure that any limits will accommodate your group's needs.
You'll need to understand if there are any termination charges, minimum subscription lengths, conditions under which the vendor can change their pricing or the plans they offer, etc. While most subscription terms for vendor-hosted applications are not nearly as horrific as those for your local cellphone provider, with the relative youth of "software as a service", there can be considerable volatility in terms of business models.
For a self-hosted application, again the pricing model may vary, but most commonly you will purchase the software via one large upfront license payment, with recurring annual payments for future upgrades. Again, knowing how license fees are calculated is important, but restrictions on document storage, bandwidth etc. are less likely to be a factor, since you're the one providing them, not the vendor.
Changing needs
Finally, keep in mind that with respect to all of the above areas, your needs will almost certainly change over time.
Will the application you choose handle these changing needs? Will a vendor-hosted application be able to scale to fit your increased needs, or are there either capacity limits or drastic price increases? What if you find later on that remote access is more important than you thought when you initially went for the self-hosted system?
In an ideal world, the Web 2.0 workgroup productivity application that you choose will be available in a wide variety of configurations, and has the option of being run either self-hosted or vendor-hosted, with the ability to easily migrate between the two. There are a large number of applications that do allow this, and certainly any popular self-hosted application will inspire the creation of third party hosting services. For applications designed from the start to be vendor-hosted, the transition to self-hosted can be much more difficult, and so is less common.
Summary
We've touched on the fact that there are a lot of things to consider when evaluating Web 2.0 applications for your workgroup. Obviously, we've omitted the most important, and that is will the application suit your needs and help you get whatever you need to do accomplished. An ideal hosting environment, matched closely to your security, access and pricing requirements, is useless if the application is rubbish.
Our intent of course has not been to overwhelm you with additional considerations, nor to turn every technology decision into a six month evaluation process. What we do hope is that we've made it clear that there are choices when it comes to self-hosting or vendor-hosting, there are a number of implications of those different choices, and these should be factored into your decision making processes. At the very least, we've provided a range of issues that you may want to consider with respect to your planned use of the application, and highlighted a number of common pitfalls associated with each hosting option.
As should be obvious, there's no universally "right way" to do things, despite any frenzy to the contrary about how "SaaS will render the idea of buying software obsolete" or "web applications can never be as good as desktop applications", or any of the other hyperboles that the computing world regularly pronounces. It's in your own interest to put pressure on the Web 2.0 workgroup productivity application vendors to deliver both self-hosted and vendor-hosted versions of their applications, so that you have the flexibility to choose which suits your own needs best.










