SaaS vs On-Premises [2021 Comparison Guide]

Compare SaaS and on-premises deployment options with the help of this brief guide and come up with a solution that works best for your business.

18:28 23 August 2021

SaaS vs On-Premises: What Deployment Option to Choose for Your Business

 

When it comes to picking the best solution for your business, the level of responsibility increases manifold—we all want the best for our business to grow. But a big flaw of today's fast-paced digital world is the ongoing proliferation of options: on the one hand, you are free to choose from an ever-growing arsenal of automation solutions, but, on the other hand, how do you know which one is the best option for your company?

 

The software-as-a-service (SaaS) market is expected to grow globally between 2020 and 2025. In 2021, this market is valued at around $145.5 billion. More and more decision-makers prefer the SaaS deployment option, typically provided by a SaaS development company (of which there are many on the market today). But what about the good old on-premises solutions? Are they being left behind or are they keeping afloat despite the onslaught of cloud computing?

 

In the spotlight today are traditional on-premises versus cloud-based deployment options. What to go for? Keep reading this comparison guide and find a checklist to help you make a decision.

 

On-prem vs SaaS Comparison

 

SaaS is an option that allows you to pass the buck to the service provider, who is in charge of managing the system data, infrastructure, and the system in general, hosted and stored on the cloud. To access the software, you need to connect a device to the Internet, and here you go.

 

In turn, on-premises (on-prem) software is hosted and stored on a company's in-house server. In this situation, the company itself acts as a provider and manages the software—complete with system maintenance, updates implementation, and data storage.

 

Now let's cut to the chase and compare both options.

 

Hosting

 

With a SaaS option, you don't need to own a local data center to manage the system as it is hosted on a provider's hardware. Moreover, you are free from cumbersome procedures related to the system implementation and maintenance: after subscription purchase, you get access to your cloud-hosted and provider-managed software. The access is via an Internet connection. With this option, your employees are in charge of accessing the system from any corner of the world (if they are granted permission, that is).

 

In short: You’ll enjoy an effortless go-live process and remote access to the system.

 

An on-prem solution needs a proper local infrastructure and personnel to install and store the software and hardware. The management is handed over to a company or, inter alia, its IT department. Such in-house system implementation and setup are rather time- and budget-consuming, but you have complete control over the system and freedom to customize.

 

In short: It requires more resources, the proper IT staff, and longer go-live time to launch the software; still, you are in full control over the entire system.

 

Budget

 

A cloud-based solution is cheap when it comes to running and updating the system, but a total cost is challenging to indicate as it adds up in the long term. In addition, the payment model is based on a monthly or annual subscription.

 

In short: It implies an iterative payment model.

 

An on-prem solution requires a heavy upfront investment; still, a one-off license fee purchase and ongoing maintenance may cost you less. But it all depends on your company's needs as the level of upgrading, maintenance, IT infrastructure, and further customization determines the final cost.

 

In short: It implies a large upfront investment but moderate long-term management costs.

 

Security

 

In the case of cloud-based deployment, the provider is in charge of data security and is liable for a disaster recovery plan. As a result, some decision-makers consider SaaS solutions not very trustworthy because of data management by an external party. But with today's impeccable security service offered by SaaS providers, there is practically no reason for such concerns.

 

In short: You don’t need to control the security program and its level-ups.

 

In the case of on-prem deployment, a company's IT department is fully responsible for data security provision. In addition, it is necessary to keep in mind subsequent upgrades of security programs and invest in them, which may also seem onerous.

 

In short: Your IT department is responsible for data security and program updates in the long term.

 

Customization and scalability

 

SaaS solutions are fully scalable and flexible in configuration. Still, problems arise when the time comes to customize. If a one-tenant SaaS lends itself to some customization, a multi-tenant SaaS solution is cumbersome to modify.

 

In short: It allows extended configuration but offers limited customization options.

 

On-premises solutions, on the contrary, provide complete freedom of customization—you are free to implement new modules anytime, but it may also cost you a penny. In addition, with your company growth, extra hardware server purchasing and IT staff extension will be necessary.

 

In short: It offers endless customization possibilities (not free, though).

 

Maintenance

 

Opting for a SaaS solution will eliminate the need for day-to-day control, ongoing system maintenance, and any technical bottlenecks fixing as it is the provider's duty. Still, you are free to validate the baseline and customize the system.

 

In short: You’ll have minimum control over SaaS maintenance works.

 

In the case of on-premises solutions, your IT team is fully accountable for the system's troubleshooting and updating, testing, and fixing additional modules or existing ones from the deployment to maintenance stages.

 

In short: The maintenance is down to you and your IT department.

 

The Bottom Line

 

The choice of a solution depends on your company's needs and expectations.

 

A SaaS solution is more suitable if you:

 

• Deal with remote working staff.
  
  
• Are fine with little participation in system maintenance.
  
  
• Don't need deep customization.
  
  
• Expect a speedy go-live and ongoing automated updates.
  
  
• Is not ready for a large upfront investment.
  
  
• Want an effortless data access and data storage scalability.

 

An on-premises solution is more suitable if you:

 

• Represent a sizeable enterprise ready for a significant upfront investment.
  
  
• Handle sensitive data and do not want to pass on data management to an external party for security and compliance reasons.
  
  
• Have time and resources to take on end-to-end control and maintenance of the system.
  
  
• Need a profound level of customization.
  
  

Hope you've found this guide helpful, and now deciding on a deployment option is more straightforward for you.