Managed applications vs traditional software: Key differences

Software constitutes a significant portion of the business foundation and working efficiency in the virtual environment today. Various applications are utilized by various organizations to execute enterprise resource planning, customer relationship management, etc. Managed applications have emerged as an acceptable solution for those in need of low-cost, easy application deployment, maintenance and security. The third-party service provider hosts and manages business software within an application to grant access to organizations. The purpose of this strategy is to keep the internal IT resources from being overwhelmed and to provide access to the core software in an efficient and reliable manner. Still, classical on-premises software needs to be installed, set up, and supported by an organization's own IT department.

In this article, we will examine the primary distinctions between managed application services and traditional on-premises software. It will compare and contrast the benefits and pitfalls of each choice to help companies choose which option is best given their needs and resources.

What are Managed Applications?

Managed applications are business software that is hosted, delivered and managed by a third-party provider in the cloud. Under this model, the application is subscribed to by organizations on a pay-per-use basis and is made accessible for use at a charge instead of as software that can be bought and installed locally on servers and devices.

A managed services provider (MSP) will support the software on their off-site data center and will be responsible for the configuration, updates, security, availability, and performance of the software. This relieves the business from needing to support the technical infrastructure and resources required to host the application. Users can access the software over the internet using a web browser or client.

Examples of common managed business applications include:

– Email

– Office productivity software

– Accounting and Finance

– CRM

– Payroll/HR

– Project management

– ERP

Aside from housing the software, managed service providers provide services like:

– Installation, patching and upgrades

– Backups of the data

– Technical support and troubleshooting

– Monitoring of the services

– Protection from threats such as firewalls and encryption

It enables organizations to free up burdens on in-house IT resources and direct attention away from app management to more strategic tasks. Additionally, it provides fixed costs as a monthly or yearly subscription charge.

What is Traditional On-Premise Software?

It is conventional on-premise software installed and deployed on servers and computers in the company's business setup. It means purchasing the software licenses, setting up, integrating and keeping the application running with in-place IT systems.

In this model, the company owns the licenses for the software and is in charge of managing and controlling the whole technology that backs up the application. The system has to be configured and controlled internally from the operating platform to the network infrastructure.

Examples of conventional on-premise business software are:

– Office suites

– Billing systems

– Accounting platforms

– Inventory management

– Appointment scheduling

– Marketing automation

– Sales force automation

– HR information systems

While there is more control and customization possible with traditional software, there are also more ownership costs. The company must purchase computer servers, data storage, network devices, security equipment, and other infrastructure in order to host its software. It also needs to hire technicians and administrators to install, configure, update and manage the application and infrastructure.

Key Differences Between the Models

There are a few key differences between managed applications and traditional on-premise software:

Installation and Deployment

The provider hosts managed applications remotely, bypassing the requirement for businesses to purchase and install supporting infrastructure. Users access the software over the Internet without the need to install locally.

Installing software on servers in traditional software paradigms entails careful planning and configuration of supporting systems like operating platforms, databases, networking, and security controls. The multifaceted process needs skilled IT personnel and administrators.

Upgrades and Updates

Software updates, patches and feature releases for applications that they host are controlled by managed service providers. This enables customers to have persistent service and continually review and test new versions in managed environments prior to rolling out modifications.

IT teams for companies that are running traditional on-premise systems must manually track vendor upgrades and updates. One must be careful when testing changes before sending them out to the whole organization to avoid conflicts or compatibility issues. The process is time-intensive and risky.

Scalability and Flexibility

Managed applications hosted in the cloud provide rapid and easy scalability to match evolving business requirements. Businesses can scale their subscription level or the number of users on-demand rather than acquiring more infrastructure. Service providers use their aggregated resources and economies of scale to deliver elasticity.

Legacy software calls for costly hardware investments to plan for growth. IT teams must also undergo disruptive installation and reconfiguration requirements every time on-premise systems require scalability.

Security and Compliance

Managed application providers who are leaders are deploying strong security controls that surpass the capabilities of most in-house IT staff. Some examples of controls are intrusion prevention, DDoS protection, multi-factor authentication, encryption and advanced threat analytics. Security infrastructure and protocols are strong, are standards-compliant such as HIPAA and PCI and deliver availability.

In legacy software, organizations are faced with the daunting task of screening, selecting, deploying, and administering numerous layers of security products across every infrastructural component. In such instances, security control or compliance policy gaps would leave the network exposed and likely produce regulatory and audit risks both.

Performance and Availability

Managed service providers also provide service-level agreements, which guarantee the up-time and response times of the applications. To maintain such high uptime, the cutting-edge data centers utilize redundancies in the servers, failover clusters, internet connections and power supplies. Performance is also maximized with network routing policies and load balancing methods, which cannot be found in traditional software installations.

While on-premise infrastructures can be optimized for high availability by using redundant setups, attaining service levels equal to or better than managed cloud applications takes huge investment and technical expertise. Even so, reliability relies greatly on the ability of the organization to support intricate infrastructure.

Ongoing Management and Administration

Managed services shift the responsibility of routine software and infrastructure management to technology partners. The provider's staff of experts performs activities such as break-fix support, troubleshooting, optimizations, backup administration and disaster recovery. This allows internal resources to concentrate on business innovation and not application maintenance.

Legacy software compels organizations to hire whole IT teams to deal with mundane application problem resolution and maintenance. That really takes a lot of investment in experienced personnel and complex administrative equipment. Instead of generating strategic influence, time is spent "keeping the lights on."

Cost Predictability

With managed applications, there is nothing to hide with monthly or yearly subscriptions and no hidden costs whatsoever. Usage requirements can be increased or decreased to precisely fit, and there won't be any surprises in out-of-the-way infrastructure or resourcing costs.

On-premise software demands significant initial capital investments and recurring expenditures associated with system growths, licenses, IT staff, maintenance contracts, and third-party services. Random problems can cause budget overruns. Although subscription arrangements are in some instances available for on-premise software, the enterprise still has to own the base infrastructure.

Access and Integration

Managed software vendors offer secure access to applications anywhere through the Internet. Platforms integrate with other cloud services with ease using modern APIs and connectors, avoiding access limitations or connectivity problems.

Legacy software architecture tends to have trouble with remote access and cloud integrations. Rigid networking and authentication protocols make it hard to access for a distributed or mobile workforce, and it may be difficult to integrate on-premise systems with other cloud platforms.

Which Is Best For Your Business?

Deciding on managed applications versus the conventional software approach relies mainly on an organization's capability and resources.

Managed services best fit firms looking to reduce demands on internal IT infrastructure and personnel. Inherent expertise of managed service providers improves security and compliance as well as optimizes application performance and availability. Highly scalable capacity supports changing usage.

Although on-premise software is unable to match cost or flexibility, it does offer organizations absolute control and customizability and is an appropriate solution when those with established IT infrastructure and departments have created a necessity for such software. Executing highly sophisticated business systems internally, however, does come with significant technology costs and threats. Platforms further can be locked in by inflexibility and therefore cannot respond to evolving needs.

In reality, numerous contemporary enterprises are employing the hybrid solution using both of the methods, and it's opted for being selective about the method used. ERP or CRM category of mission-critical software is tended to through managed services based on convenience and dependability, whereas additional apps may remain on-premise. It enables toggling of the platforms between cloud and local deployment models for software type and organizational requirements.

Conclusion

In practice, managed applications and on-premise software differ in deployment methodology. The traditional approach has a cost in terms of time, where flexibility is provided at the expense of higher technology overhead; managed services, in contrast, provide more convenience with less infrastructure demand.

Firms can center on business innovation instead of application management by engaging with top managed application vendors such as Salesforce, Workday, ServiceNow and NetSuite. The growth in this market is a sign that enterprises are increasingly adopting these services and applying them to core systems and topping them up with on-prem tools where tighter control is required. The ideal balance is simply to look at organizational priorities, capability and budget.