SaaS vs On Premise: Which Solution is Right for Your Business?

Software as a Service (SaaS) and on-premise solutions are technologies that have been implemented by many companies today. Both offer different benefits, but which one is better suited for your company’s needs?

SaaS offers easy access and lower upfront costs, while on-premise provides full control over systems and data.

In this article, we will discuss the key differences between SaaS vs on premise, so you can make the right decision based on your business scale and priorities.

What is on premise software?

On-premise software is a traditional deployment model where business applications are installed, hosted, and managed directly on your company’s own servers and hardware infrastructure. 

Unlike cloud-based alternatives, everything runs locally within your physical office or data center, giving your IT team full oversight of updates, security, and performance.

This approach is ideal for industries requiring high customization, such as regulated sectors like finance or healthcare, where you might deploy tools like custom accounting software or inventory management systems. 

However, it demands significant upfront investment in licenses, servers, and ongoing maintenance.

Advantages of on premise infrastructure

1. Full control

With on-premise computing, companies have complete control over all aspects of their infrastructure. You can select hardware and software that match your needs, configure servers, storage, and networking, and handle security systems internally.

This level of control is crucial for businesses bound by certain regulations, as they can ensure that their infrastructure is managed according to those standards.

2. Customization

Businesses also have the flexibility to tailor the system to their operational needs. For instance, they can integrate the system with other hardware or software, modify it to support specific processes, and implement unique security measures.

This customization provides a competitive advantage by allowing companies to adapt their IT infrastructure to suit their unique business model and operational requirements.

Disadvantages of on premise infrastructure

1. High initial costs

The upfront investment for on-premise IT infrastructure can be significant. These costs cover the purchase and installation of necessary hardware (servers, storage, networking equipment), software licenses, and staffing to manage the system.

For small businesses and startups with limited budgets, these expenses can be a barrier.

2. Limited scalability

While infrastructure can be designed to support business growth, scaling it can be complex, time-consuming, and costly. Often, businesses must purchase additional hardware and software.

There may also be instances where the company needs to schedule downtime while implementing these changes.

What is SaaS?

SaaS (Software as a Service) is a cloud-based and subscription-based software that is delivered over the internet as a service.

Instead of installing software on individual computers or servers like the on-premise model, users can access SaaS via cloud through a web browser.

Advantages of SaaS

1. Scalability

SaaS solutions can easily scale up or down to accommodate changing business needs. This means you can add or remove users and resources as required without significant IT infrastructure changes.

2. Flexibility 

Users can access SaaS applications from anywhere with an internet connection, making it convenient for remote teams or mobile workers.

Also, SaaS providers handle software updates and maintenance, ensuring that users always have access to the latest features and security patches.

This flexibility causes SaaS to typically have lower upfront costs compared to on-premise software. There are often subscription-based pricing models, making it easier to manage IT budgets.

Disadvantages of SaaS

1. Data security concerns

Although SaaS providers typically have robust security measures, there are still risks associated with storing data in the cloud. Businesses need to carefully evaluate the security practices of their SaaS providers.

2. Dependency on the provider

This means that the success and functionality of your business can be significantly impacted by the decisions, actions, and performance of the SaaS provider. 

The provider has access to your sensitive data, which increases the risk of data breaches or unauthorized access. If the provider’s security measures are inadequate, your data could be compromised.

Comparison of integration: SaaS vs on premise

The process of integrating infrastructure into existing business applications is quite distinct, and each approach offers its own advantages.

1. Estimated time needed

Integrating on-premise solutions typically requires more time due to the manual setup and configuration involved. The process can be lengthy and labor-intensive, potentially taking several months to fully implement.

In contrast, SaaS solutions are generally quicker to integrate. They often come with pre-built APIs and standard interfaces that facilitate seamless connections with other systems. Although some customization may be required, the overall integration process tends to be faster.

Read More: What is SaaS Integration and How It Streamline your Business

2. Customization

On-premise solutions offer greater flexibility in terms of customization. Because the software resides locally, organizations can tailor the solution precisely to their needs through modifications and extensions. This level of customization is particularly beneficial for businesses with specialized or unique operational requirements.

SaaS solutions, while offering some degree of customization, tend to follow industry-standard configurations and best practices. Any customizations available are typically provided by the vendor and may incur additional costs. 

While there is room for adjustment, the extent of customization is generally limited compared to on-premise solutions.

Read More: How SaaS Platforms Differ from Regular & Traditional Software

3. Maintenance

Maintaining on-premise solutions falls squarely on the shoulders of the organization itself. This includes managing software updates, performing routine checks, handling troubleshooting tasks, and ensuring compliance with regulatory requirements. All these responsibilities demand significant IT resource allocation and expertise.

By contrast, SaaS providers handle maintenance and updates automatically. Users receive continuous upgrades and bug fixes without needing to intervene. This reduces the burden on internal IT teams, saving time and resources that can be redirected towards strategic activities rather than day-to-day maintenance chores.

Comparison of security: SaaS vs on premise

A comparison of security aspects between the two infrastructures, along with appropriate security strategies for implementation, is provided below.

To ensure security, there are strategies that can be adopted in both infrastructures, as follows:

1. Shared responsibility model

For SaaS, this means understanding the security responsibilities of the provider and verifying that they meet industry standards such as SOC 2, HIPAA, or GDPR, depending on the organizational requirements. 

Organizational teams must also take steps to ensure proper configuration and regular reviews of the SaaS vendor’s security policies and measures through a vendor risk management program. 

Similarly, for on-premise infrastructure, this involves clear delineation of roles and responsibilities within the organization regarding data protection, access control, and incident response planning. 

2. Network security measures

For SaaS, this entails leveraging the inherent strengths of cloud-based solutions, such as automated security updates performed by the provider. Continuous monitoring and alerting systems should be integrated to track potential issues promptly. 

Multifactor authentication (MFA) is highly recommended to ensure that only authorized personnel can access the network. Furthermore, network segmentation techniques can isolate sensitive areas from the broader network, thereby reducing lateral movement opportunities for attackers. 

On-premise infrastructure, meanwhile, relies heavily on manual oversight and custom-tailored security protocols. Implementing firewalls, intrusion detection systems, and regular software updates are essential. Moreover, isolating sensitive systems via strict network segmentation further minimizes the risk of breaches.

3. Identity and Access Management (IAM)

For SaaS, IAM involves managing user access and privileges within the application itself. This includes setting up granular permission structures to limit what users can see and modify. 

Regular audits of access permissions are necessary to prevent accidental exposures. Using IAM tools can provide visibility into SaaS application usage and configurations, helping to enforce compliance with regulatory standards. 

On-premise infrastructure takes a similar approach but with direct control over server configurations and hardware. Customizing IAM solutions to fit specific organizational needs enhances data protection. 

Strict identity verification processes, akin to those employed in zero-trust models, ensure that every attempt to access systems undergoes rigorous scrutiny, regardless of origin.

Conclusion

Choosing between SaaS vs on premise solution is a pivotal decision that can greatly influence your business’s efficiency and long-term growth.

By weighing factors such as integration, security, scalability, and budget, you can identify which solution aligns best with your unique business needs.

If you’re leaning toward SaaS solutions, Mekari offers the perfect fit. Our cloud platform frees you from installation and maintenance hassles, and with ISO 27001 certification, we ensure top-notch data security.

Accelerate your operations, improve efficiency, and focus on what really matters. Ready to make the switch? Get in touch with us today!

References

Amazon. ‘’What’s the Difference Between SaaS and On Premises?’’