Executive Briefings

On-Demand Software--It's Not a Capital Expenditure

Lately, the SaaS storm has been brewing as talented developers and entrepreneurs see the potential for this new delivery system in almost every area of IT operations--and this building of momentum isn't just coming from the developer side. Doug Timmel, director of manufacturing solutions for on-demand software provider Bluewolf Inc., points out that another big reason to make the SaaS switch lies in the boardroom's budgetary battleground.
"While traditional on-premise software is considered a capital expenditure, on-demand software is typically sold as a subscription, which means corporate buyers can account for it as a maintenance expense. By employing the SaaS model, manufacturers don't have to budget scarce capital to software expenditures," he notes. "With tight capital expense budgets, this is a benefit that buyers can use immediately."
Source: Industry Week, http://industryweek.com

Lately, the SaaS storm has been brewing as talented developers and entrepreneurs see the potential for this new delivery system in almost every area of IT operations--and this building of momentum isn't just coming from the developer side. Doug Timmel, director of manufacturing solutions for on-demand software provider Bluewolf Inc., points out that another big reason to make the SaaS switch lies in the boardroom's budgetary battleground.
"While traditional on-premise software is considered a capital expenditure, on-demand software is typically sold as a subscription, which means corporate buyers can account for it as a maintenance expense. By employing the SaaS model, manufacturers don't have to budget scarce capital to software expenditures," he notes. "With tight capital expense budgets, this is a benefit that buyers can use immediately."
Source: Industry Week, http://industryweek.com