Cloud or on-premise? When choosing from among hotel software vendors, hoteliers are frequently confronted with a choice between traditional on-premise or locally installed software and cloud-based software which exists in the internet. When comparing prices of these two types of systems, the comparison seems at first glance quite simple. The cost of on-premise software consists of an up-front license fee plus annual maintenance fees whereas cloud software vendors generally charge a monthly fee. What hoteliers tend to overlook are the hidden costs associated with on-premise software – both at the time of installation and later during normal operation of the software.
In order to objectively compare the financial implications of both types of systems, we have compiled a list of the hidden costs.
Hidden costs of on-premise software prior to going live
- Cost of server hardware, server operating systems, database software and back-up hardware and software
- Cost of an air-conditioned server room along with increased energy costs
- Cost of on-site implementation of the hotel software along with travel costs
- Cost of on-site training along with travel costs
Hidden costs of during the operation of on-premise software
- Staff costs for the administration of the system, including timely patching of the operating system and virus scanner as well as system backups
- Server maintenance costs
- Costly updates of the hotel software after regular intervals along with hardware upgrades, system downtime, additional training and associated travel costs
- Annoyed guests and staff due to system downtime
- Incalculable costs of loss of data due to virus attacks, security leaks and hardware failures
Why does cloud-based software have none of these hidden costs?
With cloud software, all you need is an internet-ready device, user name and password. The cloud software vendor takes care of everything else. Cloud-based software is already installed and running in the internet. The monthly fees should be all-inclusive – without any hidden costs.