When migrating to the cloud, in most cases, the first option to consider is rehosting. In some cases, however, this is not possible because the legacy application is not capable of running in the cloud. At this point, an organisation has to decide if they would like to give up one of their legacy applications and go to market to purchase a different one.
Repurchasing is the strategy that sees an on-premises legacy application being fully replaced by a SaaS (Software as a Service) solution. Known colloquially as ‘drop and shop’, repurchasing describes the process of switching to a different product, typically by moving from a traditional licence to a SaaS model. The application is then no longer maintained in-house, with the user purchasing the data and the SaaS offering from a vendor.
Predominantly a licence model, repurchasing entails an ongoing fee based on usage. It can be a good strategy for organisations that prefer an OpEx option over a CapEx one, as it helps them to forecast cash flow more effectively and better manage their costs.
Benefits
Replacing legacy applications with SaaS avoids many potential migration risks and offers the advantages of scalability, lower upfront costs, swift configuration, and ease of use. Vendors of SaaS solutions regularly improve and update their systems, and organisations are able to shop around to find the service that best suits their needs. At the same time, a licensing model means that if a different application appears in the future, it is much easier to switch, rather than being tied to an existing version that has been purchased outright.
With the cloud provider hosting the application, they are also responsible for all maintenance, upgrades and security patches (which generally happen automatically) – freeing the organisation up to concentrate on its core business.
Tips for a smooth transition
When migrating with repurchasing, there are a couple of main options to consider. Previously, customers may have had an in-house on-premises application written or, more likely, purchased from a vendor. In this scenario, when moving from this version of the application to the SaaS version from the same vendor, that vendor will provide the migration path. This may even be automated, in which case the customer simply agrees to the new licence and the migration of all data and users is handled automatically.
A new version of the application, however, even if it is via the same vendor, may come with a new look, feel and way of doing things. And this is going to entail training costs. Users can neglect to plan for this necessity, leading to an unexpected and unwelcome cost and pain point at the end of the migration effort.
Another potential obstacle on the route to a smooth migration is when a customer looks to repurchase the same application in a SaaS offering from the same vendor, but their original on-premise version has not been well maintained or regularly updated. The vendor may only provide a migration path for the latest on-premises version or the most recent couple of versions.
In such cases, the migration path may be interrupted and the costs begin to rise, as the migration cannot be performed optimally, but requires additional effort via some manual migration. It’s important, therefore, to look closely at the existing on-premises version and check that it is supported before migrating to the cloud.
Use cases
In most cases, repurchasing is the sensible option for standard business applications that support standard business functions. Finance, accounting, human resource management, customer relationship management (CRM) and content management systems (CMS) are common among most companies and organisations, no matter what the industry. So, for these functions, there are more options available for repurchasing.