The ROI of cloud-based computing

Then came ASP, or application service provision, and previously one could say Cleopatra, ASP was dead, a victim of the turn-of-the-century disillusionment with IT in general and dot-com computing in particular.

* Consider the acquisition cost of a business-critical software suite. Factor in the cost of the software licence itself, the database, the supporting hardware and the implementation costs. Companies must as well factor in that in most cases, the implementation deadline will slip, often years beyond the initial deadline.

The issues of business fit

Then there are the issues of business fit, meeting deadlines, the embarrassment of incorrect billing, non-billing, impact on cash flow, and guarantee of value delivery.

The South African model of SaaS says billing is incremental, and only increases as the customer obtains business value and growth. The traditional model says the customer assumes all the risk, with no guarantee of successful implementation or value delivery. The only guarantee is that costs will mount.