There is an excellent article on this by Jeremy Quittner. I have pasted the url in the trackback link.
In a startup when things go good, the initial growth phase is fast, in fact, rapid. Though revenue incoming is slow, more staff are added, more-than-needed-top-level-executives-added, sales figures are floated, something-like-marketing done, customers grow from y to
y x y , no time to stop and take stock and ........
One fine day, realization dawns that there is no control left and it is just about Just In Time handling of scenarios. And then, a seemingly small screwup happens, and then you realise that it is not a small screwup but the starting of an avalanche!
Now what????
Cost-cutting starts. Heads roll. Pink slips are the call of the day. Pick any guy who did not say hello to the dog ;-) and fire him. At all costs, cut the flab! All because of a lack of structure to maintain the progress.
Here SaaS services help. They quantify and qualify the effort done and justify the expenses too. There is no shoving data under the carpet and no lofty talks. All that matters is the data. Rest all are fluff as they should be.
Robert Mahowald, director of SaaS and on-demand research at Framingham
(Mass.) researchers IDC, says hosted software can bring cost savings of
25% to 60% if maintenance and IT staff are factored in.
SaaS is not the answer to ALL the problems. There will always be certain things that are required to be onsite. But look at the cost-savings factor and the less-hassles factor. You save time in hosting, bug-fixing, server updates, etc. All these further lower your expenses and you can pass on these benefits to the end user.
There is another interesting manner of differentiating the SaaS vs the non-SaaS impact as mentioned at
http://wekti.com/2008/12/04/saas-and-the-shift-from-it-capex-to-it-opex/.
Think about it.
Shankar
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