It is clearly a hot topic in the industry. It is the most feared and wanted new thing on the market. There is a lot of buzz but most people don’t have a clear understanding of what Cloud POS is all about. This hype introduced a lot of new terms to POS which became for many people a general association with the overall topic of Cloud POS. I would like to break them down and explain each the distinctions between each one.
This will hopefully paint a clearer picture of the new POS technologies for your business and guide you in your selection process.
SaaS – Software as a Service
SaaS is the core idea of the whole movement and probably the biggest change to the method of selling software ever. The idea of SaaS is that you pay for using the software as you would a utility instead of buying a license. The SaaS model has several big benefits for businesses:
- There is no upfront investment required.
- The cost is predefined and usually includes updates.
- Up- and downgrades are possible at any time and add flexibility.
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The original meaning in relation to computing stands for applications which run on multiple machines and utilize combined resources to achieve better performance and less failures. Today the term is mostly associated with hosted application services. Cloud systems almost always use a SaaS sales model because it is the only distribution model for software that really fits and is probably why many see these two terms as synonymous, but they are actually not.
SaaS solutions are not only cloud based and cloud based solutions can be distributed through a mixed model (meaning there is an upfront cost on top of the subscription fees), which sadly is not so uncommon. A few major benefits for businesses are:
- Backups are taken care of
- Hardware failures are managed faster and often seamlessly, so as not to affect your operations
- Hardware failures don’t cause additional expenses
- The data is available anywhere at any time
- The data is physically protected from your own staff
- No complicated on site IT management required
Clearly, internet connectivity is something you have to worry about but there are many solutions which can work offline. You just have to decide if it works for you.
Web-based applications should be very familiar to almost everybody already. Most of us use several web-based applications on a regular basis nowadays, such as Gmail, Sales Force, Quickbooks Online, etc… These are applications which are completely dependent on an Internet connection. This means there is no access to the application without an Internet connection.
For POS applications this is a very important thing to realize, because in the event of an Internet failure, you will not be able to access your web-based POS system and these also suffer often from lag due to overloaded or slow connections. It could be that you have to wait several seconds for each function, such as opening a new ticket or booking a single item, to execute because there needs to be a call back to the servers that run your application and the connection isn’t fast enough. Also, these typically do not have direct access to peripherals.
If you can live with the disadvantages, web-based applications are a very convenient solution. You can access them anywhere from any device. If you have a web-based back-office solution you will most likely not suffer too hard from a connection problem because a little delay while getting you reports will not immediately hurt your business. A delayed or paused checkout on the other hand is much more threatening. So make sure you don’t rely on web-based applications where you cannot afford temporary dropouts or performance deceleration.
Some of you are probably thinking “how on earth is this related to cloud pos?”. To make this clear: it is not! Nevertheless people relate this to the whole movement. Why? – because the majority of these new iPad POS solutions are developed with some kind of cloud technology and distributed as SaaS. In addition most traditional POS solutions haven’t made the transition to the cloud, which doesn’t make them dinosaurs quite yet, but at least pretty old-fashioned.
What should I use?
As with everything, the answer depends on your unique requirements, but below are a couple guidelines to help you put this information to good use:
- You have a small, very mobile business with a very limited budget, you only require basic functions such as creating a sale, accepting a credit card and want minimal reporting. If this is you, then you may benefit from one of the lightweight iPad POS apps on the market, as long as you can confirm that you will have the necessary connection for processing card transactions wherever you set up shop next. These are easy to take along and should have the most basic functions that you will need.
- In most other cases, the most versatile and reliable technology is going to be a combination between cloud based and traditional POS technologies. Many systems will have a base system will all the necessary functions you need and additional options so that you can choose what kind of advanced features you want so that you only pay for those that you use. This is great for small and large businesses alike. By using this combination of technologies, you make sure that you’ll still have access to your point of sale application, even if the internet cuts out for a bit. The POS should be able to store the data that it needs locally, is with traditional POS software, however the difference (and real benefit) comes from the back-office being stored in the cloud instead of in a server in your back office and because of this, you will most likely access the back-office through a web browser. This will allow you to keep track of your business from anywhere you have a browser and internet connection, whether you’re in the office, at home or on the go.