Benefit of swapping SaaS to in-house

Data Architecture 9 May 2022

The Build vs Buy dilemma is not a new one – with the maturity of usage of any tool, it becomes an increasingly important question. In the case of software and the services around it, this is an issue that probably every large company is currently grappling with throughout their IT infrastructure. In the case of digital marketing, there are new considerations to highlight in this debate – especially now that Cloud computing and Cloud-based products are all around us. 

At fifty-five, we are partners to numerous SaaS solutions and support their implementation and servicing while also involved in building proprietary Cloud-based solutions for our clients. This article aims to share the experiences we’ve had, and weighs the benefits of moving away from a SaaS model, if applicable, by the virtue of exposure to both sides of the aisle.

A real-world retail example

To help explore the various advantages of in-housing, I will refer to a case study for a retail client where fifty-five designed and deployed a cloud-based marketing automation solution. The service was created to replicate a basket abandonment marketing communications software for which the client was previously contracted to a SaaS provider. 

In essence, the pipeline was designed to target customers who have engaged with the client’s checkout funnel on their website but have not completed their purchase. These customers are then sent targeted and personalized marketing communications based on their website activity in the hope of re-engaging them.

Signing up to a SaaS tool in the short term was, in this case, a great approach for the client to learn about the benefits they can reap from such software with minimal initial investment. After this period of familiarisation, the limitations of the ‘industry standard’ SaaS product became apparent, as well as the mounting inherent costs. It was at this point that the client chose to move to a more long-term economically sustainable solution – in-housing.

In order to assist with the replication of the service, the client enlisted fifty-five who utilized Google Cloud Platform (GCP) as a medium. The benefits of in-housing this service, which can also be applied to most other in-housing projects, can be summarised in three key points: Cost Efficiency, Customizability and Security.

Depending on your situation, investing in an in-house solution can prove to be more affordable from the offset. In this instance, fifty-five helped to move the retail client away from a high 6-figure yearly subscription fee. The same marketing automation capability was built with GCP at a fraction of this yearly cost. Even when taking the maintenance and resources required to operate the solution into account, it is estimated that the cloud-based bespoke solution costs less than 30% of the SaaS investment, which will only become more efficient going forward due to the initial deployment being finalized. Additionally, GCP offers full visibility of spend as well as a breakdown of individual component costs and the ability to set pricing caps and alerts giving complete control over the solution outgoings.

With the flexibility afforded by a bespoke Cloud architecture, our client was able to improve the functionality and personalization of their basket abandonment campaign. This consequently increased their conversion rates and revenue per session by the addition of new bespoke functionalities. These included, but were not limited to, incorporating the inventory level of products into the solution logic to offer alternative products if the original was out of stock, and tracking customers’ involvement in other website processes, such as credit checks, to further personalize the emails. The client was also able to integrate their pipeline with a dashboarding tool to monitor bespoke KPIs, and utilize other communication channels not offered by their legacy SaaS solution. 

The basket abandonment solution, which involved the handling of PII, was hosted on a secure GCP dataset which provides encryption in transit and at rest by default. By handling the data processing ourselves, we were able to give the client full control over their security measures and ensure that their bespoke requests were met. An example of this was that all PII, which included email and phone numbers, was only ever stored as encrypted values, and that decryption only ever occurred in temporary memory during processing. As well as this, GCP offers further security measures such as data lifecycle management and other methods of key encryption which were utilized to ensure all data was secured and fully GDPR compliant.

Here is a summary table of advantages for both solution types:

AdvantagesIn-HousingSaaS
Cost Efficiency
  • Cheaper long term
  • Full visibility of spend
  • Control over cost
  • Cheaper short term
  • No upfront costs
  • No technical resources needed
Customizability
  • Can tailor solutions to meet needs
  • Can integrate with other tools
  • Full control over support team
  • Industry-standard solution
  • Issues covered by SLA
  • Minimal expertise needed
Security
  • Sensitive data remains in-house
  • Implement own security measures
  • Subject to major cloud policies
  • Don’t manage security processes
  • Mitigates responsibility to 3rd party

Table 1 – In-Housing vs SaaS advantages

Summary

While an in-house solution can initially set you back in terms of time, resources, and money, having final ownership of your own bespoke service with the benefits of customizability potentially provides a much greater value add proposition. Furthermore, you might just realize that the expenditure saved from the SaaS subscription fee model leads to the in-housed solution paying for itself in a matter of months. The control around privacy, security, and availability can also ensure your service is compliant with modern regulations and accessible to users whenever needed at a global level. 

Conversely, canceling a SaaS subscription can be detrimental. Not only will you lose access to the tool, but often all the assets hosted on it and any accompanying expertise built around the tool. In fact, this is often how SaaS models lock you in. This drawback, coupled with the relative difficulty in customizing and integrating the solution with other services and the mounting costs of subscription fees, makes SaaS a less economically viable option; especially if the problem you’re trying to solve is non-standard or you’re trying to minimize long term costs.

Hosting solutions on the cloud is becoming progressively easier, especially with an increasing number of managed services removing the need to provision your own resources. Trusted partners, such as fifty-five, are here to help pave the way meaning there’s no better time than the present to get involved!

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