If you haven’t heard the phrase Software-as-a-Service or SaaS for short then its time to crawl out from under your rock as it is fast becoming the technology of choice for many businesses to replace traditional on-premise software.
There’s a good reason for that too as confidence is high, there’s continuing growth and access has never been easier due to faster connectivity. Therefore we’re starting to see several business software solutions catching the media buzz – including social CRM, business intelligence, customer experience management and so on.
However how does SaaS compare to the more traditional on-premises solution? We’ll give you the full rundown and our verdict of which is better.
That one burning question: is SaaS cheaper than on-premises?
Generally on-premises deployments require greater upfront investment, especially compared to a SaaS subscription model. The main reason for this is installing costly hardware on-site. On-premises models typically require ongoing expenditure including maintenance, upgrades, support fees and license fees. However with SaaS you avoid additional charges for upgrades, hardware and administration and license fees are typically bundled into the monthly subscription. There’s no hardware to install or maintain, you simply log in and go.
SaaS will however include additional charges if you require more storage, industry-specific functionality or premium support packages. So with all costs considered SaaS is generally the cheaper option for many businesses for both short term and the long term.
Our verdict: SaaS
What are the benefits of both SaaS and on-premises?
The SaaS model does give you immediate business benefits with frequent updates, shorter deployment times and independence from IT. You’ll also have more usability from end users due to mobile apps and online presence.
On-premises solutions give you more integration with your existing IT and operational systems and you’ll have a tangible product, which will be available for reselling at a later date.
Our verdict: SaaS
SaaS or on-premises: which is most flexible?
Both SaaS and on-premises are scalable, are easy to configure and have technical flexibility. SaaS however is more flexible for the end user as there are no limitations when it comes to access apart from a working Internet connection. The software can be accessed from multiple devices, from any where in the world. On-premises solutions deliver proven integration capabilities and a stronger tool set for customization. Therefore both models have differing benefits but cancel each other out.
Our verdict: Draw
Is SaaS still as risky as it was?
On-premises models have been around longer than SaaS therefore it is viewed by many as less risky. SaaS tends to center around impact risks such as loss of control, integration issues and data storage being off-site. On premises risks are more related to implementation such as deployment, support and training. Which model has the least amount risk is difficult to justify as ultimately it depends on the businesses operations.
Our verdict: Draw
The differences between SaaS and on-premises
|Software-as-a-Service (SaaS)||On-premises software|
|Fast start up||Takes time, personnel and equipment for set up|
|No server hardware (purchase or maintain)||Purchase and maintain server hardware|
|Subscription model – lower commitment||Long term planning – strong commitment|
|Monthly fees||Large upfront costs|
|No tangible assets||Tangible assets which could be resold|
|Rapid deployment of upgrades||Slower, costly upgrades|
|Monitored network and server security||Requires additional time and software for security|
|Off-site backup facilities||Tape/CD/DVD backup or additional service|
|No physical access to servers or storage||Access to servers and storage in-house|
|Requires an Internet connection||Optional Internet connection (website hosting)|
SaaS or on-premise? Ultimately it comes down to how your business operates including investment models, level of risk, where you want data stored and who you want maintaining your software. SaaS is steadily becoming the primary option for most businesses but on-premise still does have a place in today’s businesses.