1.1.4 Compare the implementation of systems using a client’s hardware with hosting systems remotely. 

The primary focus of this assessment statement revolves around Software as a Service (SaaS), but more broadly, it concerns the support of local IT systems through external assistance. Several examples illustrate these concepts.

Introductory Definitions and Comparisons:

1. Outsourcing: This is a general term encompassing all services provided by an external entity, typically a company external to a specific organization.

2. Hosting Systems Remotely: This involves hosting one or more complete IT systems through outsourcing.

3. Cloud Storage: This refers to the remote storage of data only.

4. Software as a Service (SaaS): This entails running application software from powerful remote servers.

While these concepts have slight differences, it’s worth noting that their benefits and drawbacks are generally similar.

Outsourcing: Outsourcing entails delegating certain components of an IT system to an external entity, often in another country.

Outsourcing, as a widely applicable practice, involves obtaining goods or services from an external or foreign supplier, typically instead of relying on internal resources. IT firms, in particular, frequently utilize outsourcing due to the specialization and cost-efficiency it offers. Cost savings are often achieved by outsourcing to countries with lower IT labour costs. Outsourcing services in the IT domain can encompass a variety of functions, including help desk services, SaaS, and cloud storage.

Hosting an Entire System Remotely: One example of outsourcing is the remote hosting of an entire IT system by an external company. In this setup, a company accesses services such as payroll processing through a remote system, with all processing taking place on external servers managed by the remote hosting company.

Examples include:

• Payroll systems
• Help Desk systems (e.g., Apple Support)
• Entire company/organization websites and associated services
• Specific components of industrial/commercial businesses, such as customer discovery and analysis for a particular business.

Benefits of Hosting Systems Remotely:

• Specialization of the hosting company
• Enhanced reliability due to specialization
• Easy service updates
• Resource savings (no need for the organization to maintain specialized servers)
• Reduced memory and storage usage on user hardware
• Lower maintenance requirements for the user
• Overall cost savings stemming from resource savings.

Drawbacks of Hosting Systems Remotely:

• Reduced control, potentially making it harder to tailor to specific needs
• Security concerns
• Dependency on the internet
• Latency issues due to physical server remoteness
• Time zone conflicts, particularly for worldwide services requiring 24/7 availability.

Note that certain systems should not be outsourced due to security and privacy considerations. Security systems and sensitive databases, for instance, are typically better managed in-house unless impractical.

Cloud Storage: Cloud storage involves saving data for individuals or companies on remote servers, either as the primary storage location or as a backup. Examples include Apple’s “Cloud” and Dropbox, where both individuals and organizations can opt to have another company handle a significant portion of their data storage and processing.

Benefits of Cloud Storage:

• Enhanced reliability through backup and redundancy
• Access from anywhere
• Simplified data sharing (e.g., Dropbox)
• Overall cost savings

Drawbacks of Cloud Storage:

• Reliance on the internet
• Slower access compared to local storage
• Environmental concerns regarding the energy and water usage of server farms
• Ceding control of data
• Privacy and security considerations.

Software as a Service (SaaS)

Software as a Service (SaaS) is a method of delivering applications via the Internet, essentially as a service. With SaaS, an individual, company, or organization leverages remote computers for their data processing needs. The actual software execution occurs on these distant servers. As a user, you interact with what’s known as a “thin client”; you observe the processing outcomes (output) on your screen and provide input from your thin client station, typically your internet-connected computer.

This approach is reminiscent of older mainframe systems in the 1970s and 80s, where “dumb terminals” were linked to powerful mainframe computers. In the contemporary SaaS paradigm, software primarily resides on potent remote servers and is accessed via the internet using “thin client” computers.

Examples of SaaS include Microsoft Azure and Amazon Cloud, encompassing both server space and databases. Typically, SaaS software is licensed on a subscription basis, with monthly payments.

A familiar instance of SaaS is when you use machine learning servers from institutions like MIT or Google for your AI experiments. You send your input, and the processing is performed as a service provided by these institutions, with the results returned to you.

Benefits of SaaS:

1. Potential for Cost Savings:

   • Reduced hardware requirements since robust equipment isn’t necessary.
   • Scalability, enabling adjustments to meet specific needs, with payment based on actual usage.

2. Specialization:

   • SaaS providers specialize in specific services, ensuring access to the latest versions.

3. Anywhere Access:

   • Requires only a browser and internet connection for accessibility.

Drawbacks of SaaS:

1. Lack of Control:

   • Reduced control over application behaviour compared to in-house management.
   • Privacy and security concerns as sensitive data is handled by the SaaS provider.

2. Reliance on the Internet:

   • Browser-based remote hosting often results in slower processing compared to local software.
   • Service unavailability during internet downtime.
   • Time zone challenges with support.