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Choosing the Best Digital Signage Providers: SaaS vs Self-Hosted

Author: Bill Gerba on 2009-07-09 21:33:23

A few days ago, David Keene at Digital Signage Magazine posted an article on sorting out the mess that is our digital signage software industry. With over 300 companies pitching some remarkably similar products, it's not uncommon to get a call from a breathless lead who has your kit confused with that of your nearest rival (or ten) before you've even had a chance to talk. Sidestepping that whole problem though, David chose to zero in on one of the hot-button issues of the digital signage software world: the pros and cons of utilizing a SaaS -- or software as a service -- solution. As he told me later, his intent was not to take sides, but merely to start a healthy debate. Given the number of comments I received about my reply on Digital Signage News and the feedback that David mentioned he was getting in his inbox, I'd say he succeeded. Let's take a look at the issue in more detail.

OK, what's this SaaS thing again?

We talked about digital signage software as a service (SaaS) a few weeks ago, in the context of whether SaaS is more environmentally friendly then hosting your own servers. But for those of you who just joined us, we'll take a step back and look at the big picture. After all, I hate it when people throw around acronyms and abbreviations and just assume you know what they're talking about. So here's a quick rundown: SaaS, or software-as-a-service, describes a system where instead of installing an application on your own PC or server, you simply access that application via the Internet. For example, Microsoft Word is a software application you install on your computer. Google Docs, in contrast, is a service that provides similar functionality, but resides on a Google server and is delivered to your web browser over the Internet.

Back in our neck of the woods, some digital signage providers will sell you a software package (or packages) that you install on your own PC or server, which you then use to manage your network of screens. With this option, you buy the software, you buy the hardware to put it on, and you buy the network bandwidth, etc. required to hook it up to the 'net. With the SaaS option, these things are all provided as a service, typically in exchange for a monthly or annual fee. While you don't get to pick out all of the bits and pieces yourself, the tradeoff is that you don't have to manage and maintain those individual components either. As you might imagine, some people have pretty strong feelings one way or another on this issue. Since WireSpring sells both self-managed and SaaS products, I've been party to a good number of discussions in both directions over the years. While I can't claim to be completely unbiased here (a bigger share of our revenues come from the service model), I'll try to explain some of the fallacies behind the SaaS approach, and describe when it might -- and might not -- be the best tool for the job.

In defense of the SaaS model

As David Keene noted in his article, anti-SaaS folks tend to get stuck on the notion that "premise-based digital signage content management software packages are often more scalable, more secure, and more reliable [than software-as-a-service solutions] because they are not based on a constant internet connection." Since we hear the same concerns from prospective customers from time to time, I thought I'd briefly summarize my position on each:

First, on the matter of scalability, that's just silly. If my SaaS system didn't scale, I couldn't make any money by selling it to multiple customers. In fact, I live and die by how much it costs to add another node to my SaaS network, and I guarantee you that other SaaS providers feel the same constraints. At the end of the day, my servers provide fast, reliable service to thousands of nodes. Not many other networks can make that claim.

Next, when it comes to relying on the Internet, there probably will be certain cases where having to use (and rely on) the Internet to shuttle content back and forth is undesirable. In these rare cases, a SaaS system is probably not right for you. But in many, many cases, self-hosted systems still use the Internet to move content out to different players, and in these cases, they're no better off than SaaS systems. In fact, our SaaS system is hosted at multiple data centers around the country for geographical redundancy, and other providers probably take that same approach. Thus, I'd be willing to bet that most self-hosted networks are actually more vulnerable to network hiccups, not less, since they don't typically take these costly precautions.

Finally, on the issue of security, any SaaS provider worth his salt will have dedicated, full-time network security employees who constantly monitor, patch and test their servers to keep them secure. We can spend six figures a year on security because that cost gets spread over many clients, all of whom benefit from it. But most self-hosted networks can't make that claim. And until somebody shows me definitively that my network is less secure than somebody else's, I don't give that argument any credit whatsoever.

To SaaS, or not to SaaS?

OK, so with regard to the three complaints above, my argument is that SaaS offerings are no worse than self-hosted ones. But are they better? Sometimes, yes, sometimes, no. For example, if your network is going to be completely disconnected from the Internet, a SaaS system is probably a bad choice (unless you're talking about a multicast solution running on a private network). If you don't need to centrally manage your nodes, there's really no point to using a SaaS solution (though by the same token, there's nothing to self-host in that case either). And if your system requires a substantial amount of software customization at the head-end, self-hosting may be your only option.

On the flip side, a SaaS solution makes a lot of sense if you don't have any in-house technical expertise, or your resources are already stretched thin. Just like outsourcing your email and web site service to a hosting company, using a digital signage SaaS service can remove a lot of the technical challenges and reduce deployment times and costs. The best digital signage SaaS providers will also be able to give you top-tier services like edge-of-network caching, geographic failover, and long-term data storage for a fraction of the cost of doing it yourself, again because that cost gets spread out over multiple clients. And of course, the web-based nature of many SaaS providers allows them to quickly roll out changes based on new web technologies -- often much faster than traditional software packages would be updated.

You'll notice that one thing I haven't mentioned at all is pricing. Considering the breadth of software offerings out there today, there's no way to say that SaaS is cheaper than hosting it yourself, or vice-versa. I've seen server packages priced from free (yeah, right) up through six figures. And I've seen monthly SaaS fees pitched from the low single-digits to the low triple-digits per player. It's just all over the place. I will say this though: if you come to me and insist that you "have to" host the servers yourself, without being able to provide any quantitative reasons why, then you probably don't know what's actually best for your business. There shouldn't be any ego or politics involved in making your technology decision. But on numerous occasions, I've run into exactly that. (At this point, all the SaaS salesfolk reading this article are sagely nodding their heads.) If you have a real business or technical reason for preferring one approach to the other, fine. But if you don't, you need to get one before you buy anything.

I'm sure plenty of you have your own opinion about the SaaS vs. self-host question, and I'd sure love to hear your perspective. Take a moment to leave your thoughts in the comment form. (Email and RSS subscribers, click the link below to access the form.) Thanks!

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