Hosted Software 101: Top Tips for the AEC Industry
Unlike traditional, on-premise software, hosted software doesn’t have any upfront costs, which makes it a more suitable option for small and medium companies that want to optimize their IT spending.
Headline report:
Table of Contents:
Hosted software definition
How hosted software works and which are its benefits
The difference between hosted software and SaaS
Hosted software costs
Challenges related to hosted software
The myths regarding hosted software
Myth #1: Hosted software is more sensitive to security breaches
Myth #2: Hosted software is expensive
Myth #3: You need to choose between hosted software and on-premise software
How to make the best choice for your company?
1. Hosted software definition
If you have ever been interested in monitoring your AEC company’s IT costs and identifying opportunities to reduce them, then you must have searched, at least once, for the hosted software definition.
According to Techopedia, hosted software is software that is installed and hosted on a remote server by a third party vendor and which may be accessed from anywhere in the world, through a good internet connection.
2. How hosted software works and what are its benefits
Like on-premise software, hosted software is purchased under licence. The difference is that it is not installed on the user’s actual working site, but in a data center managed by a software vendor or by a value added reseller (VAR).
Since it is installed on a remote server and not on the user’s actual machine, hosted software may be accessed through a web browser, like any other Internet page or platform.
The primary benefit is that it is accessible from different touchpoints and terminals, no matter where the users are located, as long as there is a proper Internet connection.
This is particularly useful in the AEC world, where different professionals, with different roles and locations need to access the same software, apps and project information. This way, for example, people on the job site may be able to use the sketches and documentation available to those in the office.
Unlike traditional, on-premise software, hosted software doesn’t have any upfront costs, which makes it a more suitable option for small and medium companies that want to optimize their IT spending. This way, the servers and data center are the responsibility of the vendor, so there is no need to purchase the actual hardware.
Moreover, it also reduces maintenance costs associated with fixing bugs and updating versions, as well as the need for upgrades, since these changes are all performed on the remote server. With hosted software, end-users aren’t required to have the latest technological models to run modern apps, nor are they dependent on the computing power and data processing of their local machines. The main server’s processing power facilitates access to a wide range of end-users.
Another benefit of hosted software is the fact that it enables backups, offering end users access to their data, whenever something goes wrong. If your company uses Azure backup, for example, it benefits from centralized management in the Backup Center, application consistency, multi-workload support and durable storage options. This means that, even if users lose their folders and files, they may restore them to the latest backup.
Scalability is also a benefit of hosted software systems, since it enables companies to adjust their IT infrastructure resources in accordance with their needs, in little time. Companies may, thus, upgrade their servers’ performance, make system configuration changes, increase storage capacity etc., in a way which is fast and cost-effective.
3. The difference between hosted software and SaaS
As explained in our previous blog posts, software as a service functions on a monthly, subscription-based licensing and delivery model. This is why it is also known as “on-demand software” or, as Microsoft used to call it, “software plus services”.
The first difference between SAAS and hosted software is that it is rented and offers a price / user. Depending on the size of the organization, as well as its needs, the overall fees may make it less efficient than the hosted model. Especially in the AEC industry, where companies have relevant security needs and use several types of programs and apps, hosted software may prove to be a better solution.
The second important difference is that, in a SaaS model, customers’ data is stored in the same database, but accessible only to people in the organization, based on the proper credentials.
When it comes to software as a service, customization is limited, because the system’s settings may only be changed to some extent and customers receive more or less the same features and treatment. Hosted software, however, implies that customers own the software, which means that each project is treated differently and adjusted to the organization’s needs.
Thus, each company receives its own access to servers, software and databases, thus benefiting from more flexibility.
4. Hosted software costs
A question our AEC customers ask frequently is what costs are associated with hosted software and whether this is the best, more effective solution for their companies’ needs.
Of course, this is difficult to say, until we analyze each business’ profile, the resources it needs, the number of employees and partners which require access, the terminals used etc.
Still, there is also a straight answer here: each hosted software solution has 3 price categories which include licensing, implementation and maintenance.
The licensing fee comes first, as it grants companies access to the actual software.
Implementation costs cover the above-mentioned customization part, as well as the installation and the training required to make the project successful among organization members and ensure the adoption is a smooth, effective one.
Maintenance fees are consistent, monthly / yearly costs, which cover the following aspects: support, updates, security, backups etc.
5. Challenges related to hosted software
Of course, like any other solution, hosted software comes with its share of challenges that organizations need to acknowledge and consider, before making a choice.
One is that organizations don’t have 100% control over costs and that, due to technological advancements and needs, the maintenance fees may rise over time. This is something you may expect, but which you cannot foresee completely, as hosted software customers rely on the vendors to update and upgrade their hardware.
Since the data is stored in a vendor’s data center, the vendor may have direct access to it. While there are clear policies regarding how your data is protected, it is always important to check with the vendor and see what the procedure states. Moreover, if you are an AEC company that is involved in national security projects or which deals with sensitive information, you might want to check whether your clients and partners require you to have an on-premise data center that you may fully control.
Sometimes, professionals come to us, at AEC Cloud, with price assessments that they make, without taking into the account the specifics of their businesses and without considering their customization needs. In these cases, they expect a certain pricing, but, as needs expand, their budget needs to do the same. This is why it is extremely important to assess your activity from the beginning and ensure you get a good estimate, on which you may rely.
When it comes to hosted software, companies don’t know exactly where their data is stored, which means that they don’t always know what laws and regulations govern the partnership. This is why at AEC Cloud, we make it our priority to explain to each customer what is the location of the web hosting partner and what security protocols they follow.
6. The myths regarding hosted software
Hosted software is still a complicated topic, which has been gathering confusion around it. In our first discussions with professionals in the architecture, engineering and construction industry, we know that there are certain questions we need to tackle, to ensure they have all the information, so as to make a choice.
Myth #1: Hosted software is more sensitive to security breaches
FALSE. From their desire for control, many companies consider that anything that is out of their physical reach and which is not completely handled by their internal teams is less safe than a fully owned and operated solution.
This is, however, not the case, as, often, hosted software is even safer than its on-premise alternative, because it is managed by a specialized provider, which dedicates its time and resources to creating the best environment for your data.
Opting for a professional hosted software solution might prove to be the best decision your company has ever made.
Myth #2: Hosted software is expensive
FALSE. Although we often explain, on our blog and in our discussions with partners that hosted software is a solution that enables companies to save money and become more effective, there are several prospects that express their concern regarding costs.
Hosted software solutions have lower costs than on-premise ones, because they do not require an actual investment in hardware and because the hours dedicated to upgrades and updates are divided between multiple customers, which makes maintenance fees significantly lower.
Even if monthly / yearly costs increase, from one year to the other, they are still lower than what it would involve owning and operating your company’s own data center.
Myth #3: You need to choose between hosted software and on-premise software
FALSE. Many of our clients in the architecture, engineering and construction industry try to find the ideal solution between hosted and on-premise software. Making a choice seems like a compromise, because neither of the options responds to all their needs.
From our experience, though, there is no need to decide, especially if the complexity of the business does not allow it. In many cases, a hybrid model, which involves both hosted and on-premise software may be the best option for companies with complex needs and with wide ranges of professionals and collaborators, that require different access levels and security standards.
7. How to make the best choice for your company?
If you are considering whether a hosted software model would be a good choice for your AEC company, there are several attributes you need to bear in mind:
Hosted software offers your architecture, engineering or construction company the flexibility it needs and enables different professionals to access documentation from their jobs sites.
The costs associated with hosted software may be broken down into monthly fees, which enables you to direct resources towards operational areas that enable your company’s development.
Hosted software has lower maintenance costs compared to on-premise models, which makes it more manageable financially.
Hosted software offers scalability.
Still, if your company has strict contracts, which require full data control, some projects might require an on-premise model. This doesn’t mean, though, that you need to take hosted software out of the picture. You may talk with your provider and identify the best hybrid solution for you.
At AECCloud, we have experience in managing complex projects, for AEC businesses, so, if you want to understand what hosted software may do for your company in saving resources and delivering more efficient projects, contact us.