Chad Kramlich, chief revenue officer of Open Sky Group, explains the difference between applications delivered in the cloud and those via software as a service (SaaS), and how the latter model applies to modern-day warehouse-management systems (WMS).

While considered a variant of cloud technology, SaaS involves purchasing software on a recurring basis, with the customer being billed periodically. With cloud applications, by contrast, the customer is actually purchasing the computing power, Kramlich says. And on-premise software is that which resides within the customer’s own servers.

WMS applications have been less quick than other types of software to embrace the SaaS model. One reason is the site-specific design of the application. Another is its execution-based nature. “At the end of the day, someone running a WMS is shipping product and generating revenue,” says Kramlich. “So there’s a tremendous reluctance to give up control of that system.” But warehouse managers are gradually making the shift. WMS, he adds, is currently in the midst of a transition from onsite to a hosted model. “More and more clients are feeling comfortable with it being not on-premise.”

The SaaS model of WMS holds several advantages over on-premise versions, he says. It requires fewer technicians and support staff on site. Maintenance is handled by the software provider. Upgrades are relatively easy to install without the need for in-house experts. And a SaaS-delivered system discourages the kind of customization and modifications by the user that often result in significant downtime. Kramlich suggests that some warehouses overestimate the supposed uniqueness of their systems, and consequent need for tweaking. “The more you go between facilities, you find out that most of the time nobody has created anything unique,” he says. “Don’t do modifications. Embrace the software as it is.”