Hosted versus Local Applications

At Ventura Tech clients often ask us whether we recommend a hosted or local application.  As Internet bandwidth increases and storage costs decrease, the world is moving towards hosted solutions, but the decision depends on a particular clients situation.  

Hosted applications offer several advantages, including:

  1. Lower Cost of Entry: Traditional software packages can cost hundreds if not thousands of dollars.  Hosted software is billed monthly and business typically see a lower cost of ownership.
  2. Easy Access: Users can work from anywhere with an Internet connection, enabling collaboration.
  3. Maintenance: The vendor is responsible for upgrades, uptime and security.
  4. Reliability: Typically hosted services include uptime guarantees, redundancy at multiple locations and a load balanced architecture allowing for scalability as companies grow.
  5. Support:  Hosted service providers have professional service teams who can leverage their expertise to minimize learning curve headaches and maximize utilization of the application.
  6. Centralized Administration:  Hosted applications like Office 365 allow a central admin to administer user licenses, which is a useful feature for larger companies.

That’s a nice list of advantages but in certain cases local applications still makes sense:

  1. One Time Fee: This is attractive in certain financial situations.  Perhaps a client has the resources to purchase the software now, but is concerned about cash flow in the future.
  2. Ownership: Once a the software is purchased the application can be used as long as OS support is available.
  3.  More Control and Functionality: With certain hosted applications if an issue arrises, the hosting company may be needed to address it and this can take time.  In addition, with certain applications some hosted solutions offer less functionality than software owned in house.
  4. Better Bandwidth: Although Internet bandwidth continues to increase, it is still much faster to move files within an office network.  For applications with large file sizes, it may make more sense to work in a local environment.

One of the more common applications where the question of hosted versus local comes up is Microsoft Office.   Microsoft offers a hosted version, Office 365, or a local version, Office 2016.  The following table highlights the differences in costs and features.

In this case, Microsoft has priced 365 so that $230 for the local version equates to 2.5 years of Office 365.  If a client updates applications more frequently then every 2.5 years, then 365 makes sense.   In this case the client will get the benefits of a hosted application and the online storage included with 365.  On the other hand, Office applications tend to not require regular upgrades (I am writing this blog article in 2015 on Office 2011).   If the client has the resources to by the software up front and doesn’t require regular upgrades, then a local version may make sense.

These can be tricky decisions, but Ventura Tech is here to help.  If your small business is debating a hosted versus local application, contact Ventura Tech and for advice and assistance today!