What’s the difference between “In-house applications,” versus “SaaS solutions,” versus “Hosted solutions?” It's important to distinguish between them and use the proper terminology. These terms have been further confused by the frequent use of Cloud computing and the “Internet of Things.”
In house refers to applications that are installed behind a company’s firewall. ERP applications are generally installed behind a company’s firewall, in-house.
SaaS solutions are standardized software solutions that provide you with specific functionality. CRM applications, business intelligence solutions and other reporting solutions are often SaaS solutions. SaaS solutions generally say, "Here's our software and here are the report options. What features and functions do you want?" Then you pay for the options you select. They are applications that allow very little customization and are therefore easy to manage by the vendor. Users typically pay a subscription fee based on the functionality they selected. If you want anything outside of what you pay for, there are fees associated with it that generally include hourly fees for development. People often feel “nickeled and dimed” by SaaS solutions once they find out they need more than what the solution offers.
Hosted solutions are software solutions that can be customized. They are offered by vendors and data input is typically managed by the vendor. There is typically a subscription fee and data management fee, often based on what data is integrated, the time required to manage data loads and storage requirements. These applications offer more flexibility to enrich and enhance the solution. They also offer end users more freedom to create their own reports. Sales analytics, and business intelligence applications require customization and integration with internal data sources in order to meet user requirements and maximize ROI.
The ability for power users to create ad-hoc reports is allowed in a hosted model. If your company intends to support the needs of true data science, then they must offer solutions to their data scientists that allow them the freedom to create ad-hoc reports and do true predictive analysis and data mining.
Both SaaS and Hosted solutions can be considered “Cloud Computing.”
Depending on the application and the user requirements, different solutions may fit your goals better than others.
If you have a business need that would best be addressed by a solution that requires multiple data sources to be integrated, then you would want a Hosted or In-House solution. A SaaS solution simply does not fit this requirement because you are buying that vendor’s software and they are giving you certain capabilities.
Any solution that requires your data to be integrated with it, needs to support the on-going requirements to integrate your internal data sources with the solution itself. Any application that needs regular inputs of new data should also leverage a hosted or in-house model. POSmart, for example integrates your internal master data with point of sale data from retailers as well as data from syndicated data providers. A hosted or in-house model is what is needed in this case. A solution like Salesforce.com for example is good for managing your contacts through the sales process. It typically takes a one-time upload of data from your database and that’s it. The SaaS model works well for this.