Saas Vs. Client-Server Software Applications In Healthcare

This white paper provides a comprehensive review of the total cost of ownership of SaaS (Software as a Service) applications in healthcare settings.

The annual cost to own and manage traditionally delivered software applications can be up to four times the cost of the initial purchase. So, IT departments have to spend 75% of their total budget maintaining existing software and hardware. This cost-of-business limits the ability of many organizations to introduce new applications to take advantage of innovation and support growth needs.

Outsourcing to a Software-as-a-Service (SaaS) provider is often more cost effective from a total cost of ownership (TCO) perspective, and frees organizations to innovate faster. However, because there is a difference in pricing models, the subscription cost of a SaaS application can seem to be more expensive over a multi-year period. But when the cost of hardware, seat licenses, upgrades and especially all the professional services requirements are included, frequently the SaaS alternative has a lower total cost.

Software Models
Traditional Software

In a traditional software model, a software application is purchased from the software vendor with a large upfront license fee, together with annual maintenance and upgrade fees. The application is typically loaded on a dedicated server purchased and hosted by the customer. There may also be seat license fees if client applications are required for individual users, particularly if remote access is required, or if a larger number of users need access.

In addition to the upfront software and hardware purchase, the traditional software application must be configured and integrated. This process often requires lengthy and costly (up to 12-18 months in some cases) customization of the software, interfacing with existing applications and deployed with adequate security and redundancy. The customer is also responsible for on-going end-user support and training.

Therefore, traditional software deployment incurs a variety of capital and operating expenses, as outlined above, in addition to the allocated IT support FTE expenses. In the ASP model, traditional software applications are hosted by an application service provider (ASP). In many cases, this is just a partial outsourcing of the hardware and software, with a front-end to allow web-based access. Generally, the ASP does not have specific application expertise and the software is not designed for remote access. Therefore, performance is poor, interfaces are challenging and many of the traditional self-managed software limitations (e.g. application updates, configuration, customization, training, support, etc.) still exist. However, in many cases upfront costs are reduced and redundancy and security are improved. Access This Content To Read This White Paper In Its Entirety.