Things to consider when deciding between a SaaS vs an on Premise Point of Sale system!

SaaS has emerged onto the point of sale landscape in a big way. As with many technologies there is some confusion and things you shouldconsider when you evaluate a SaaS solution. This is the first of three blog posting I will make dealing with SaaS issues. The first will deal with some misconceptions and confusions. The second will provide a list of things to consider when evaluating a SaaS solution and the third will list the majors concerns and questions you need to ask before you sign a contract.

First let’s deal the confusion: Many POS companies are portraying their software as a SaaS model when in fact it’s a hosted model. The simple difference is that a hosted model is when you buy the software and it’s “hosted” in an off premise facility for a monthly fee. You access the software through a web browser. In a SaaS model you pay for the software and hosting on a subscription basis usually for a contractually specified period of time. Again you have access to the software from a web browser usually for the backroom and administrative functions. Most of the SaaS providers support the POS functions on premise based POS computers to ensure that your sales are not at the mercy of internet availability. In essence it’s a hybrid model using both on premise and hosted access to the system.

There a few other nuances to the SaaS model you need to know. Most contracts bundle support and software upgrades into the monthly fee but there are some hard costs that most SaaS providers charge for in addition to the monthly fee. Usually you pay upfront for the POS hardware, training and implementation services. Sometimes these fees are bundled into the monthly fee but in either case when you looking at the cost of the SaaS solution you should ask for an itemized line item quote to understand all the costs associated with the deployment. In some retail verticals I think the SaaS model makes sense. It usually allows a retailer to deploy a system much quicker and at a lower upfront cost but there a many other factors to consider. My next blog will deal some of those factors.