DAM System

Digital Asset Management: SaaS or On-Premises?

November 24, 2021

Advantages and disadvantages of the different licensing models for DAM Software

Just like most software solutions, Digital Asset Management Systems (DAM) can either be installed locally (on-premises) or used directly from the manufacturer's or provider's cloud (Software as a Service or SaaS). In the first case, the company is responsible for hosting and storing the software and data on its own server. In the second case, companies use the IT infrastructure of their DAM provider. The provider runs the DAM software on its servers and the companies access the application via the Internet with their web browser. Each solution approach has its advantages and disadvantages and must ultimately be analysed and tested for the individual business model and the existing company structure.

When is a local DAM solution beneficial?

One argument for a local installation is a slow internet connection. If companies have an unreliable or slow internet connection due to their location, they often opt for an on-site solution to benefit from a faster server connection. Another argument for an on-site installation is the issue of "control". Some companies want to maintain full control over the installed version, the stored (business-critical) data and the IT security through their internal IT department. In this case, they are independently responsible for updates, backups and protection against security risks. If companies want to integrate the system with other in-house solutions, a local installation can simplify the implementation process. Also, the customisation capability of an on-premises solution is often greater compared to cloud services, which are used by many customers in the standard scope.

From a financial perspective, a local installation is usually more cost intensive than a SaaS solution. This is due to the fact that in addition to the licence fees for the software application, companies also have to provide further monetary, human and time resources for the following disciplines:

  • Hardware: Additional costs for server and network hardware
  • Additional software: Additional costs for virtualisation software, databases and operating systems, if applicable
  • Internal IT: Additional human resources may be required to manage and maintain the new system environment
  • IT security: Costs for security checks, secured server rooms, external monitoring systems
  • Roll-out: Usually more time-consuming roll-out until go-live as well as additional costs for (external) project management
  • Licence fees: High one-off costs or initial investment

When is a cloud-based DAM solution beneficial?

At the same time, the cost centres listed above provide arguments why more and more companies are turning to cloud-based solutions when purchasing software:

"81% of companies run at least one business application (e.g. ERP, CRM, PIM, MAM) or part of their computing infrastructure in the cloud."

Source: IDG, Cloud Computing Research 2020

Basically, SaaS solutions eliminate the costs and efforts for in-house software administration. Thus, SaaS solutions are suitable for all companies that do not want to make large investments and one-off costs. Companies do not buy licences, but pay a rental fee (usually on a monthly or annual basis) for the number of activated users. At the same time, companies retain the flexibility to expand or reduce the booked capacities at short notice. Moreover, updates and maintenance services provided by the software manufacturer are included in the licence fee. Thus, cloud-based DAM solutions are also suitable for small and medium-sized enterprises that do not have a complex IT infrastructure or their own IT experts.

Since cloud-based DAM solutions are accessible via the web browser, teams can access the stored data regardless of their location. A DAM solution from the cloud is therefore also suitable for companies with multiple locations as well as companies that are increasingly shifting their workplace to the home office (modern workplace). Companies that want to make their data accessible to external stakeholders (e.g. agencies, suppliers, sales partners, multipliers) also benefit from a cloud-based solution. Another major advantage of obtaining a DAM system from the cloud is the often faster availability of the media. Modern software companies such as DemoUp Cliplister host their applications on a network of geographically distributed servers (Content Delivery Networks or CDN), which drastically speeds up the transfer of media to websites and online shops, which ultimately also helps to improve the customer experience.

Especially at the beginning of the implementation, a DAM system as a SaaS solution promises financial advantages compared to an on-premises solution, as no initial investment is required. In the long term, however, a SaaS model may incur higher costs than a self-hosted system. With an on-premises solution, though, ongoing infrastructure and maintenance costs must be considered in addition to licensing costs. If you want to know exactly which licensing model is really the cheaper option for your business model, you should make a detailed cost comparison in terms of a "Total Cost of Ownership" (TCO for short).

„Total cost of ownership (TCO) defines a comprehensive assessment of information technology (IT) or other costs across enterprise boundaries over time. For IT, TCO includes hardware and software acquisition, management and support, communications, end-user expenses and the opportunity cost of downtime, training and other productivity losses.“

Source: Gartner Inc., Glossary

To determine whether a SaaS solution is cheaper in the long run than an on-premises variant, Gartner recommends making a detailed cost comparison over a period of at least two to three years, taking into account the total cost of ownership.

Experience DAM live from the cloud

DemoUp Cliplister offers its DAM system as software as a service. When it comes to hosting, the company relies on the most modern technologies, which ensure outstanding performance and IT security. Experience the benefits for yourself in a non-binding online demo. Our experts will be happy to show you the advantages of the DAM solution from the cloud for your business model in detail.

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