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Gary Sanders: In-House Versus Hosted Software

A profile picture of Gary Sanders, seasoned expert of utility billing.

Utility industry expert Gary Sanders has partnered together with MuniBilling to help give readers an in-depth look into the world of Utility Billing Systems.

For today's Ask The Expert blog, we'll focus on the difference between hosting your software in-house versus through the cloud!


Q: Sometimes, organizations struggle with whether or not they’d like their billing software to be managed in-house or hosted on the cloud. What’re your thoughts on the matter?


A: I actually worked for a computer service bureau when I first started in this business over 40 years ago. In the early days of computers, service bureaus provided computer time to other businesses on a rental basis.

I’ve seen utility billing systems evolve from service bureaus to a series of in-house systems. Starting with proprietary minicomputers, then UNIX networks to Windows client-server networks, to in-house web-based systems, and now to cloud-based hosted systems.

It’s bizarre, but we’ve come full circle as hosted systems in the cloud are today’s equivalent of the 1970s service bureau.



Q: The media tends to refer to hosted software as “cloud computing.” What does “cloud computing” specifically refer to?


A: According to Wikipedia, “Cloud computing is the on-demand availability of computer system resources, especially data storage (cloud storage) and computing power, without direct active management by the user.”

From the perspective of utility billing systems, cloud computing means running the billing software in what is often called a hosted environment.

In a hosted environment, the software (in this case, the billing application) and the information (the customer and billing data) are stored on remote servers accessible via the internet.

In coming full circle from the original service bureau environment to the hosted systems of today, web servers replace mainframes, the internet replaces leased data lines, and personal computers (or even tablets) replace bulky green-screen terminals.



Q: So, what would you say are the main advantages of hosting one’s software on the cloud?


A: Hosted systems eliminate the need for in-house application servers. This saves the utility the initial purchase price of the server hardware and operating system software.

It also saves the labor costs associated with ongoing server maintenance and upgrades.

Data backups are performed for you in a hosted environment and don’t require your staff to remember to swap backup media each day or take the latest backup offsite.

Most cloud computing environments rely on redundancy, eliminating downtime due to hardware failures or power outages.

Finally, a hosted environment is accessible anywhere internet access is available.

Unlike in-house systems, which require a virtual private network (VPN) to access outside your office, a hosted system is as close as the nearest internet connection.



Q: Would you say there are any real disadvantages to hosting?


A: The only real disadvantage to a hosted environment is that it requires internet access. If internet access is unavailable, then the billing system is unavailable.

This potential obstacle can be overcome by having a backup internet service provider or using cellular broadband access when your primary internet access is down.



Operational Analysis

Gary's 40+ years of experience in the industry has granted him valuable knowledge for any billing entity. With the wealth of his knowledge, you can request an Operational Analysis for your organization from him!

You may be wondering, what exactly is an Operational Analysis? Well, it essentially is when Gary looks through ALL of your systems and interviews your team to figure out how best you can improve your billing operations.

Here are a few of your organization's systems that Gary will assess:

  • Billing System
  • Accounting System
  • Metering System
  • Service Delivery System

The end goal of this analysis is to figure out how to save your organization time and money best. This could also mean suggesting another company's platform if it's the better fit for YOU.

Gary has hosted his own blog for the past ten years. Some of his more notable credentials is that he has designed, built, implemented, and supported both ERPs and Utility Billing systems. Thankfully, he's only a hop, skip, and jump away.

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