In House Your SaaS Infrastructure or Outsource It?

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By Merrill R. (Rick) Chapman When Softletter first began running it's SaaS survey in 2006 the overwhelming majority of SaaS firms told us that they managed their infrastructure in-house (for the purposes of the survey, we ranked colocation as an in-house choice). I don't have the exact numbers in front of me as I write this, but I think the number was close to 70%. When I talk to advocates of keeping infrastructure in-house they talk about the cost saving achieved. The best firms have learned to lower infrastructure as % of gross revenues to between 5% to 7%. Things like the cost of electricity are areas they watch closely. But over the last five years, the trend has steadily swung the other way. Here are the results from the 2011 survey, which closed at the beginning of November (we're currently working on the 2012 SaaS Report, which is based largely on the results. Do you maintain your own hardware/software infrastructure (personnel, servers, storage, security, software, etc) for your SaaS system in-house? Or do you outsource your infrastructure operations? For the purposes of this survey, colocation, where you own servers stored at an offsite location, is regarded as an in-house...

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