This is the second article a series of blog posts regarding design considerations for Power & Energy Management IOT Architectures. In this entry, we’ll evaluate the trade-offs between deploying an Energy & Power Management (EPMS) system on premise (OnPrem) or as a cloud-based Software-as-a-Service (SaaS). There are four key factors to consider:
Software, Hardware & Services Costs
Due to the fixed costs of a perpetual license compared to the ongoing subscription costs of a SaaS approach, it is tempting to think that an OnPrem EPMS will be less expensive over the long-term than the equivalent SaaS based system. However, when all costs are considered, the advantage typically goes to a SaaS implementation. Here is a list of the costs associated with each architecture:
Software-as-a-Service Costs
- EPMS Subscription (recurring)
OnPrem Costs
- EPMS license (one-time)
- EPMS Software Assurance/Maintenance - typically 20% of license cost (recurring)
- Operating System & Database licenses & maintenance fees (typically recurring)
- Antivirus & Patching Software Licenses (recurring)
- Servers & associated Hardware (firewalls, routers, etc.) (one-time, with ongoing costs)
- IT services to deploy, upgrade/expand, maintain & monitor (24X7) the system (recurring)
Most recent studies have shown that the lifetime costs of a SaaS solution are far less than the lifetime costs of an equivalent OnPrem approach. Here is one example.
Performance & Operational Efficiency
There are several advantages to SaaS architectures when it comes to performance and operational efficiency. The biggest one is scalability - the ability to easily adapt & expand your system as it grows across buildings, departments and geographies. SaaS architectures are designed for seamless scaling of CPU, memory and disk resources which means the performance of your applications doesn’t degrade as your application footprint expands.
Another type of scalability is related to stakeholder groups. When you deploy an Energy & Power Management solution, different user groups will want access. Some of them will be in different countries and companies. For example, assume a facility management provider is contracted to maintain your company’s facilities. This company may request access to the EPMS so that their[JH1] employees can access data while onsite performing maintenance.
Additionally, they may request access to an API so that they can access the data. In both cases, a cloud-based platform has the capabilities to make this type of access easier than an OnPrem solution.
One of the more time-consuming aspects of deploying a EPMS can come from internal IT approvals and coordination. This can lead to significant operational efficiency issues. With a SaaS model, much of that complexity is reduced since there is no onsite software running on servers maintained by a separate group. There are certainly still IT issues to navigate, such as user synchronization, but they are typically more transactional and easier to resolve.
System integrations are another common cause of complexity and inefficiency. Integrating disparate OnPrem systems are traditionally an artform rather than a science due to the myriad legacy protocols and operating modes. In contrast, cloud-based SaaS platforms generally conform to industry-standard REST APIs that allow for a more plug-and-play integration experience. To be sure, there is still complexity with integrations between SaaS platforms, but the tools and expertise required for integration are typically more efficient & reliable than the OnPrem equivalents. One caution here is that not all SaaS platforms are designed for open access to data. Some vendors prefer to create proprietary application stacks that force customers to remain within a single vendor portfolio. It is worth exploring the different integration options that a SaaS platform provides as part of your evaluation.
Risk
Cybersecurity is the top-of-mind risk when it comes to Energy & Power Management Systems. There are many aspects to take into account, including access control, authentication, securing data at rest/in transit, threat assessment & response processes and more. The procedures to secure a system will depend heavily on the network design and the capabilities of the OnPrem or SaaS platform. For example, an OnPrem platform that supports Active Directory might be more secure for user authentication than a SaaS with a proprietary system.
An important difference between the two architecture is that a SaaS introduces the Internet as a core network, whereas an OnPrem system will typically not require it. While Internet connectivity brings unique risks, there are well-established tools & techniques for securing it. A related consideration is the cybersecurity expertise of the SaaS vendor and the local IT teams. If your company has an ad-hoc approach to IT, you may benefit from a more robust approach offered by a mature SaaS vendor. If your IT team has established cybersecurity as a core competency, you may trust them more to secure an OnPrem system[JH2] .
It is important to keep in mind that a modern OnPrem system will typically need some Internet connectivity to provide the equivalent functions that a SaaS approach delivers. In this era, it is quite difficult to achieve the desired outcomes of an EPMS without that connectivity
Considering all the points above, it is clear that there are simply too many variations in architectures and expertise to make a blanket statement about whether a SaaS or OnPrem approach is more secure. Suffice to say that securing your EPMS is an essential step and requires careful analysis by cybersecurity experts.
Opportunity Cost
When considering an business case for an Energy & Power Management System, it is important to account for the opportunity cost of the upfront investment associated with an OnPrem architecture. For example, let’s say that the upfront capital costs (see first section above) are $40,000, followed by some recurring maintenance fees. That is $40,000 that is unavailable to you for other, potentially more profitable investments. What else could you do with the $40,000 to improve your bottom line? The benefit of a SaaS model is that you can preserve your capital while getting all the immediate benefits.
Conclusion
In previous years, due to the lack of maturity of cloud technologies it was not always clear whether a SaaS or OnPrem architecture was preferred. However, recently the maturity of the cloud infrastructure has made this question easier to assess. A SaaS is generally a lower total cost, more scalable solution which will free up capital for investing in other opportunities. Cybersecurity is important as well - the relative risk of securing a SaaS vs. an OnPrem system is a critical part of any assessment.