Is Web-Based Software Right for You?

Web-based and Software as a Service (SaaS) applications are quickly becoming the norm in many industries. The property management industry is no exception. In this overview, we’ll cover what a SaaS system is, what an on-premise system is, the difference between web-enabled and web-based, and the advantages and limitations of using this type of software in the property management field.

Software as a Service Is Here To Stay

The Software as a Service model of deploying software has come of age and is gaining traction in property management companies. Property managers are adopting this Internet-centric model to offload the burden of server maintenance and data backup, while expanding access to their system and providing their staff with an intuitive user interface. While some managers might remain skeptical of new technology and question a third-party’s ability to safeguard their data, the early challenges with SaaS have been overcome. To assess the SaaS model, it is important to first understand what it is and how it differs from traditional software deployment models. Many property managers have heard of SaaS or “web-based” software, but few understand the differences between traditional client/server, web-enabled, web-based and SaaS systems. In this article, we will define these models and outline the advantages and potential disadvantages of each.

What Is a SaaS System?

SaaS refers to a type of software deployment in which all of the system’s software and data is hosted and managed at a central data center operated by the software vendor. The property manager simply uses the system through their web browsers and a broadband Internet connection. The software vendor will manage data backups and periodic updates. The management company will typically pay a monthly subscription fee to use the service, rather than purchase the software up front. Examples of SaaS property management software products include Propertyware, AppFolio, Buildium and DIY Real Estate Solutions.

What Is On-Premise or Client/Server Software?

The alternative to SaaS is the traditional standard of client/server, on-premise software. Fewer property management companies today are using this deployment model for their software. In this model, software is installed on the server and on each computer in the office. The server hardware is located in the property management office and is accessed on the PCs used by the property managers and other staff. The company is also responsible for data backup and security. Typically the software is purchased upfront and there is an annual support fee to cover upgrades and customer support services. Leading products like Rent Manager, Property Boulevard, and Spectra are all client/server, on-premise systems.

Then What Do “Web-Based” and “Web-Enabled” Mean?

While SaaS and web-based have pretty much become synonymous, subtle differences can be drawn. Some systems are web-based in that users access the system through a web browser; however, the server that hosts the system is maintained on-site by the management company (i.e. “on-premise”). “Web-enabled” refers to a hybrid model in which a traditional client/server system is augmented with an added feature that allows users to connect to the system over the Internet using tools such as Citrix or a special browser-based user interface. This web-enabled option might be used as a way for a property manager to access the system from home or the office. Alternatively, some companies choose to use the web-enabled model to offload server maintenance to a third-party hosting company. Many client/server systems provide a web-enabled option.

In Brief: Client/Server, Web-Enabled, Web-Based, and SaaS

Client/ServerHosted Client/ServerWeb-BasedSaaS
Server DeploymentSoftware and data reside on a server that is located and managed in the office.Software and data may be deployed on-premise or at a third party host.Software and data reside on a central server, which may be located on-premise.Software and data reside on a central server at the software vendor’s data center.
User InterfaceSoftware is installed and managed on each user’s PC.Users access the system using a web browser or Citrix.Users access the system through a web browser only. No software on a PC.Users access the system through a web browser only. No software on PC.
Pricing ModelTypically an upfront perpetual license with an annual support fee.Usually a perpetual license, but could be a subscription.Usually a perpetual license, but could be a subscription.Primarily pay-as-you-go subscription fees, usually charged monthly.
AccessibilityAccessed on-site, although remote PCs could access the server through a VPN.Accessible both on-site and remotely using web browser or Citrix.From anywhere with Internet access. Must have dependable Internet.From anywhere with Internet access. Must have dependable Internet.
IT MaintenanceOn-site by property management staff or an IT consultant.On-site by property management staff, an IT consultant, or a hosting company.Can be outsourced to a third party or managed internally.Server maintained 100% by the software vendor. Staff maintains PC hardware.

What Are the Advantages of a SaaS System?

  • Limited IT burden. A key reason why many property management companies choose the SaaS model is that their data is secured at a centralized location and monitored by IT staff that handle routine back-ups, upgrades, modifications, installations and necessary maintenance. The security and maintenance is typically far superior to what a property management company could implement in their own office. Moreover, there’s no need to buy server hardware.
  • Ease-of-use. SaaS and web-based systems are often easier to use. Since the user interface is essentially a web page, the user experience is often on par with making a purchase online. If you’ve successfully made a purchase on Amazon.com or eBay, you can probably figure out how to use a SaaS or a web-based property management system fairly easily.
  • Remote access. Many property managers appreciate the ability to access their management software from outside the office. This might be while doing rounds at local properties or updating records in the evening at home. With a SaaS system, users can access their system from anywhere they have Internet access.
  • Subscription pricing. Management companies often like the subscription model of SaaS. Subscription pricing means that the upfront costs are low as the fees spread out over time. Thus, these expenses become an operational expense versus a capital expenditure.

When Is SaaS Not Right for a Property Management Company?

  • Poor Internet access. With the SaaS model, it is important to have a quality Internet service provider (ISP) that is optimized for speed and has dependable bandwidth. If the Internet goes down, the system is down. Of course, on-premise systems can go down too when there are networking, electrical or hardware failures.
  • Complex customization. Because SaaS systems are typically designed to serve numerous clients from a single, centralized “code base,” there have traditionally been fewer options for complex customization. This, of course, is changing over time as SaaS vendors build out more advanced configuration capabilities.
  • Long-term pricing parity. While the subscription pricing model reduces up-front costs, those regular fees add up over time. In the long-run, SaaS fees will typically equate to those paid up front for a perpetual license for a client/server system.