SaaS or Self-Hosted: Which Model is Better for a DMP?

As with any decision, the process of adopting a new software application can be long and arduous, filled with tough choices.

The same goes for a choosing a data-management platform (DMP).

Today we explore one of the most fundamental choices between using a self-hosted or SaaS-based model.

Both options offer pluses and minuses — vendor lock-in, data privacy, customization possibilities, time to benefit, to name just a few.
First, a quick review…

• A Data-Management Platform (DMP) is an application for advertisers and marketers who want to personalize and optimize their ad campaigns and website content. Generally speaking, it combines data taken from a variety of sources, creates audience segments, and integrates a range of programmatic media-buying and -selling tools such as ad exchanges, demand-side platforms (DSP), and supply-side platforms (SSP).
• Software-as-a-Service (SaaS), also known as cloud computing, offers users access to applications over the internet without requiring the software to be physically installed on a user’s infrastructure. Users get immediate access to the application and generally pay a monthly or yearly fee instead of buying a program up front. The vast majority of SaaS applications are offered in a public-cloud environment, meaning the software is hosted on the vendor’s servers and made available to all users equally.
• The term self-hosted may be used to indicate applications physically installed on in-house servers and infrastructure. However, it may also mean an application is hosted in a private or hybrid cloud controlled by the company.

Self-Hosted vs. SaaS DMP: Vendor Lock-In

One of the main pluses of SaaS applications and a big selling point, especially for small- and medium-sized businesses, has always been that the entire burden of technical support (including updates and bug fixes) is on the vendor, as opposed to a self-hosted platform where the burden falls more on the DMP user.

Relying on the vendor to take care of everything, however, has its minuses too.

First there is the issue of technical support. Even though SaaS vendors may offer a Service Level Agreement (SLA) for technical issues, they are often geared towards their entire client base and don’t take into consideration the wide range of client needs.

For some this just isn’t enough since it doesn’t take into consideration their individual usage of the platform, and yet, because they are locked into a vendor, there are limited options for fixing the problem themselves.

Besides that, there is the question of data ownership — who really has control of the data used in the DMP? In business, it is a general best practice to keep multiple copies of critical information, meaning, ideally, a company would want to have its audience data stored somewhere in-house. When locked into a SaaS vendor, this may or may not be possible, and what happens if you want to change to a different DMP?

Even if a vendor would theoretically let you transfer your data after you cease to be its customer, there would remain the issue of logistics connected with transferring such complex sets of data from one third-party vendor to another. Very often, different vendors use different data formats, which would make translating data sets from one form to another nearly impossible.

Obviously, when you go to implement a powerful tool such as a data-management platform, you will want to start using it and seeing results as soon as possible.

Here, a SaaS-based model holds the advantage. Much like consumer-oriented cloud applications (think Evernote, Dropbox) there is no up-front delay while software is installed, checked and, if need be, fixed. After signing up, an app user can pretty much get started using the application right away.

The one caveat to this is that because a DMP from a large vendor will most likely come with a plethora of features, it may actually take some time before your marketing team fully understands how to use it.

Depending on your specific goals and the scale of your business, you may be forced to wade through a workflow that is more complicated than if you used an self-hosted application, customized for your needs.