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by Alan Joch, Contributing Editor   | Abstract: | The software subscription model promises cost savings and fewer maintenance headaches for a core application category. |
When Scott Baxter founded SA Baxter Architectural Hardware in Chester, NY, almost three years ago, he reluctantly purchased a top-of-the-line enterprise resource planning (ERP) system. Feature shortcomings weren't his concern; rather it was the up-front investment in servers and software licenses that troubled the start-up CEO. "We went kicking and screaming" when it was time to pay for the software license, Baxter says. His company manufactures custom architectural hardware, including the ornate door knobs and hinges that now adorn a new luxury hotel in Beijing. Previous jobs in high tech and finance had introduced Baxter to software subscription models that allowed companies to pay for essential programs for a set monthly fee without installing their own hardware to run the applications. But Baxter couldn't find an acceptable ERP program that adopted this software as a service (SaaS) model until a year after his company opened for business. Baxter calls the interim period a disaster. "I needed big-company functionality, and I'd find myself outgrowing [the purchased ERP program] on a weekly basis," he recalls. "So I would have to call my local developer to customize the program to my requirements, and I would get bills that were ridiculous." [Click to continue] |