Trend #2: Hosted vs. SaaS association management systems (AMS)
A few years ago, large organizations wanted premise-based systems. But now, it’s no longer standard (or desirable) to have a system running from multiple servers inside your building. Instead, it’s a given that your AMS will be hosted elsewhere, most likely on the AMS vendor’s cloud.
Tip: If you’re not familiar with the hosted model or why you might actually want your mission-critical systems to live off premise, here’s an introduction to cloud computing.
Capital vs. Operational Expenses
When you purchase a “hosted AMS,” most of the time you’re making a capital investment up front for enterprise software, and you pay a monthly fee for maintenance and for hosting on your vendor’s cloud. Part of this monthly fee also covers scheduled, automated upgrades. However, customizations you make can greatly complicate and delay upgrades because you have to retrofit your customizations into each new version of the software.
SaaS (Software as a Service) is a subscription, or pay-as-you-go, web-based application that’s usually funded as an operational expense, rather than from your capital budget. You pay a monthly licensing fee per user as long as you wish. In general, a SaaS AMS is more of an “out-of-the-box” product that isn’t as amenable to customization, hence the lower cost. You have to be willing to make compromises on business processes if you go this route.
In either case, you’re paying for the right to use the software; you don’t actually own it. The key difference is how you’re paying for that right—as a capital expenditure (hosted) or operational one (SaaS). Many vendors are now breaking down the capitalized cost so it’s imbedded in the monthly fee, or they’re offering a hybrid, so the lines between hosted and SaaS systems have become even blurrier.
Can you host your own AMS?
Joanna makes an important point about hosting. She wisely says, “Don’t try this at home.” It’s best to have your AMS hosted off-premise by companies who have security expertise.
We sometimes get a request from one of our DelCor Cloud Connection clients to host their AMS on our private cloud. However, if the AMS vendor has their own hosting solution, we recommend using that. The AMS vendor would consider a third-party host (like us or any other cloud hosting provider) as a premise-based implementation that wouldn’t receive the customary automated AMS updates and maintenance.
Bottom line: when thinking about your AMS requirements and budget, you’ve got to consider where it lives and how you pay for it. You’ll want your AMS to remain current without being burdened by over-customization, and you’ll want to keep the security of your member data top of mind.
If your head is spinning, stop by and see us at the ASAE Annual Meeting & Expo. We enjoy talking calmly about AMSes; we’ll even help you find your AMS zen.
Good to know: we have no vested interested in any AMS product or company, so you get a completely independent, yet experienced, perspective on all these trends.
Up next, we’ll take a look at an encroaching “competitor”: the CRM.
Flickr photo by SenselAlan