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.

Image credit: Jeff Sandquist
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!


0 # --Ponce 2009-07-10 13:54
SaaS or no SaaS This is how I understand it ... No SaaS Reasons: 1) Your company is extremely security sensitive .. Like the U.S. Department of Defense ... 2) Very customized solution in the sense that you need your own team of programmers and IT department to monitor and tweak the system frequently and quickly ... 3) Customized interactive kiosks that act as independent information portals that also collect user input/information ... 4) You company has big pockets, or readily available resources who do, such that you can afford you very own private system, programmers and IT maintenance team Saas Reasons: 1) You are not the U.S Department of Defense and the provided security features of the SaaS solution are enough ... 2) The type of information you are piping to each portal requires little customization or a one-time customization at the onset ... 3) The interactive portals/kiosks are such that the customization is minimal (and does not require frequent tweaking) and data can reside on a remote server ... 4) You are on a tight budget and can't afford your own IT department much less you own team of programmers ... 5) You just don't want to have to manage yet another array of servers, network and software on an already stretched IT department ... 6) The low cost of upgrades, off-site server management, data storage, 24/7 uptime, and software upkeep can't be matched by your in-house resources ... and helps you sleep at night ... Is this about right? Please let me know ... --PONCE
+1 # Bill Gerba 2009-07-10 14:35
Ponce, Very nice summary. In general, I think you hit a lot of the key points right there. The only item I might disagree with is #3 in your "no saas reasons" category -- we've done a number of kiosk projects where the kiosks and kiosk applications are managed using our SaaS solution, but the data collected on the kiosks is forwarded along to an entirely separate set of servers, so that none of it ever resided on our servers. Other than that, great job, thanks for writing it up!
0 # Eric 2009-07-10 17:38
Some of Keene's reasoning makes me wonder what he really knows about digital signage. SaaS less scalable? I'm sure a "non-digital signage" company would have an infinitely easier time going from 100 to 200 players if they're using an SaaS solution compared to something they'd host themselves. Why wouldn't the SaaS provider be able to scale? As the developer they know the software / requirements best. Constant internet? The players will run through a network outage. And what multi-location signage network doesn't use the internet? Are there that many networks running on satellite data-casting? We use a "non-SaaS" software and you are at the mercy of the internet too. Unless they're using their non-SaaS software to power a large single location network (i.e. on the same intranet) this is a non-issue. Ponce: I'm not sure if #3 for "no SaaS" would be that accurate--in a lot of cases, going w/ SaaS would not be an issue.
0 # Deepak 2009-08-03 13:27
Bill, I think the digital signage platform is still developing. Implementing SaaS would severly impact those networks who seek to built innovative application to capture the attention. SaaS could be out of box solution for certain networks that has very limited need and expectation out of the Digital Signage platform. For networks, who wants to explore and push the technology limits and intend to design campaigns that set trends, needs to build them home. Another, thought Bill, its intresting that everyone in DS tech world are building their own flavor of tech. Why not put some core fundamental architecture, like the e-learning industry has set, so that the interportability of content is more easier and real to the folks generating the content.
0 # DigitalSignage 2010-07-26 14:29
Great article. As I see it this is a new era of digital signage with new LED screens that can be used to advertise at major events around the globe.
0 # Dan 2010-07-30 20:15
Has anyone found a good list of the top SAAS Digital Signage providers? I'm looking for a list to review and select from for my company and when searching online I'm only finding a few. It is posible that I'm not using the best terms but would appreciate any advise as to companies to look into.
0 # digital signage saas 2010-08-12 15:32
I think people should use digital signage saas because it is easier and cheaper in the long run. Everything is sorted by your provider instead of running your own service.
+1 # Sarah 2010-10-26 13:12
Im pretty sure SaaS is more expensive in the long run, Monthly fees are very high and additional channel players are also very high
0 # Todd 2011-01-21 19:34
Well written, I believe I have benefited from this article as I enter into sales of the SaaS model. I consider it a merit that the author introduced the article by disclosing the bias of vested interest which of itself abases no fact. Also, the restrained use of content-less sales adjectives. I consider the notable use if the "F" word! Of course by this I mean fallacy. Then to top it off, the oft avoided suggestion that one have a reason to make a judgment. The reason I mention this is it seems rather exceptional in many so called instructive articles. Well done.

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