Weighing the Recurring Revenue Options: Buy or Build? SaaS or On-Premises?

Making the switch to a recurring revenue business model is not a decision you make overnight. There are many options for filling the gaps between your existing system capabilities and the needs of a recurring revenue system so it’s imperative to understand the benefits, risks, and costs associated with each option before even beginning the selection process. Businesses today have the option to choose between Service-as-a-Software (SaaS), on-premises software packages, or custom building to their individual needs.

Choosing the right solution is a balancing act between cost, time-to-market, functionality, management complexity, and risk that varies across businesses based on priorities and current circumstances. Considering the availability of viable vendors and the risks and costs associated with custom building software, purchasing an on-premises or SaaS solution is usually the better option. In fact, current market trends favor SaaS solutions as enterprises seek to take advantage of the cost and time-to-market benefits SaaS provides.

So how do you determine which option is the best fit your company as you look at a recurring revenue initiative? First, you have to consider your current situation as it heavily influences the choices available for closing functional gaps. There are four common billing scenarios that describe the current situation for companies looking to add recurring revenue models:

  1. Green field scenario – a new startup without any existing revenue systems
  2. ERP scenario – billing for one-time sales from an ERP platform
  3. On-premises scenario – billing from a commercial on-premises package
  4. Home grown scenario – billing form an in-house, custom-built platform.

Now that you’ve identified your current situation, are you ready to tackle the specific consideration for successful implementation? The No BS Guide to Recurring Revenue Success will help address the challenges, needs, key considerations for your particular scenario. Download the guide today and take the first steps your road to recurring revenue success.

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About the Author

Eileen Bernardo
Eileen Bernardo is the Content Marketing Manager at Aria Systems where she manages content creation for multiple projects. She has an M.S. in Public Relations and Corporate Communication from New York University and a B.A. in Communication from the University of California, San Diego.

The Forrester Wave: Subscription Billing Platforms, Q4 2015

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