Buyer Beware: “Hosted On-Demand” Is No More Than a Wolf in Sheep’s Clothing

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Reeling from tight IT budgets and the consequent popularity of new software-as-a-service (SaaS) offerings, many enterprise software vendors are casting around for ways to dress up their own offerings and perhaps cash in on the cachet of SaaS and on-demand delivery. What several have come up with is the “hosted on-demand” label, which in reality is nothing more than draping the tired old enterprise software wolf in ill-fitting sheep’s clothing. As I’ve said before, enterprise software by any name, hosted or otherwise, is not a substitute for true on-demand. Software vendors taking this re-labeling route are doing a colossal disservice to customers, whether those customers buy into the name game or not.

So, what does “hosted on-demand” have to offer? Disappointments, mostly. What these vendors are doing is simply providing the same old premise-based software in a hosted environment, coupled with a seemingly substantial—but not nearly substantial enough—price break. And under the fleece is the same old ravening wolf. Hosted or not, these are still expensive solutions to implement, and shaving 30 percent or even 40 percent off the typically enormous up-front implementation cost doesn’t change that fact—and there’s still the monthly fees for accessing the hosted software to contend with. These are also typically complicated and inflexible solutions and just because they are now off-premise doesn’t necessarily change that fact.

What may well change, however, is a customer’s support priority. With two models to support—on-premise and hosted—there’s an almost invariable dilution of resources. Which customers do you think a traditional enterprise software company is most likely to make its top priority? And for that matter, what about new functionality, version control, reliability and scalability? On-premise and “hosted on-demand” implementations are identical in that each customer is a discrete box, or technology platform—it’s just that in a hosted implementation, that box has been moved off-site. But with a true on-demand solution, all customers share the exact-same platform. Just as they all share the same low cost-base, they all benefit equally from more rapid introduction of new functionality as well as from identically robust version control, data security, disaster recovery and scalability. In numbers, there is strength.

So buyer beware. Don’t be misled by labels. If you want on-demand, go with pure on-demand solutions, 100 percent purpose built to deliver the full benefits of SaaS. Avoid the nasty shock of being fleeced, and let the wolves go howl.


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Buyer Beware: “Hosted On-Demand” Is No More Than a Wolf in Sheep’s Clothing

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