Saas vs. on-premise software—what you need to know

If your IT department or organization is looking to implement new software to improve your organizational efficiency, you may be considering different implementation options to choose between. Two of the most popular options to consider are software-as-a-service (SaaS) and on-premise software solutions.

When choosing between on-premise software vs. SaaS to implement in your organization, it is crucial to understand the differences between the two options and the factors you will want to consider in your decision-making process. 

Before we dive into a deep comparison between on-premise vs. SaaS, it’s important to ensure we are all on the same page regarding what each of those terms means. While you may be familiar with SaaS and on-premise software, many users have more familiarity with one or the other, leading to inherent biases in decision-making. 

In this article, we’ll cover the ins and outs of both options so that you can make an informed decision as to what is right for your group’s needs and goals.

What is SaaS (software-as-a-service)?

In simple terms, SaaS stands for “software as a service.” It refers to software applications that can be accessed via the internet—in other words, without downloads. Users typically pay a repeat subscription fee charged on an annual or monthly basis to access these remotely hosted applications through web browsers. 

One extremely popular example of SaaS is Salesforce, a customer relationship management (CRM) platform that largely pioneered this extremely popular delivery method. With SaaS, companies can deliver applications over the internet. 

Instead of installing and maintaining software, you simply access it online—meaning that you are largely free from complex software and hardware management. Here at Atera, our all-in-one platform is fully SaaS-based.

What is on-premise software?

On-premises software, often referred to as an “on-prem” or “on-premise” solutions, are downloaded, installed, and runs on computers on the premises of the organization or individual who is using the product. 

While a SaaS product will be hosted on a remote facility, like a server farm or the cloud (nowadays, this is much more likely), on-premise software solutions are hosted in-house. Historically, on-premise software has been considered a more secure option, as you store data locally, which affords you a greater level of control. 

However, this has been largely disproven in recent years, leading to a new wave of popularity for cloud-based software in IT organizations and departments across the globe. 

Factors to consider when choosing a SaaS vs. on-premise solution

Before you decide between on-premise vs. SaaS, you should have a complete and well-rounded understanding of each option. That’s why we’ll assess the benefits of SaaS vs. on-premise software for you so that you can find all that you need to know on this page. Read on to learn more about the crucial pros and cons of SaaS vs. on-premise. 

Implementation and accessibility

SaaS: If you choose to go the SaaS route, implementation is generally very simple once you have chosen the right platform. Because the application is hosted on the internet, there is no need to install software, manage upgrades and new releases, or manage a server. 

This eliminates a lot of the challenges and flattens the learning curve that on-premise solutions generally have, and makes SaaS the right choice for most people who don’t have experience with managing IT systems.

On-premise: When compared to SaaS, on-premise implementation can be a longer process. Why? The organization will need to procure certain hardware to host software in-house. Typically, on-premise software is considered to offer more control — but that comes with less flexibility because the application cannot be accessed off company grounds. 

SaaS vs. on-premise cost comparison

SaaS: Many organizations are attracted to SaaS software offerings because of the lower barrier to entry in terms of costs. Typically, access to these types of software will be subscription-based — so the upfront costs will be minimal, and you will pay each year or each month according to your license type, the number of users, and other factors. 

For instance, Atera’s cloud-based IT software employs a disruptive pay-per-technician pricing model that is well-suited for growth and scalability. Not to mention that SaaS software get updated constantly, and you can have the latest version with a click of a button. 

On-premise: Generally speaking, IT departments will have much higher upfront costs when working with on-premise software. The SaaS vs. on-premise cost comparison nearly always favors the former, as on-premise software is costly to set up and implement. 

While ongoing maintenance costs may be low, in-house solutions often require expanded IT infrastructure, experienced and trained personnel, and hardware updates add up over time. 

Scalability, growth, and upgrades

SaaS: Because of the various license types and subscription models available, SaaS solutions are typically optimized for growth and are easy to scale up or down based on your business needs. 

You can usually add additional users, bandwidth, licenses, or servers quite easily during your subscription term. If you need to upgrade for additional capabilities, you will generally be able to do so with no problem. 

On-premise: These solutions are a bit more complex when it comes to growth and scaling. If your business is in a rapid growth period, it probably makes more sense to opt for a SaaS solution. 

But why? With in-house hardware and on-premise software hosting, there is a lot more investment in terms of both time and money to expand or scale back the software offerings.  The benefit, however, is more opportunity for customization. 

Maintenance and support options

SaaS: These solutions are offered by a third party as a ready-to-use product, so the client is not in charge of application maintenance or support. Instead, the vendor will likely offer patches and updates to ensure optimal functionality for users. Many SaaS products also have large online communities and knowledge bases to help users troubleshoot should something go wrong. 

On-premise: Because the software is not hosted by a third party, organizations are typically left to their own devices when it comes to maintenance and support. Often, an in-house team is required to successfully perform maintenance and ensure the software continues running smoothly to eliminate downtimes and decreased productivity. 

Cybersecurity and compliance

SaaS: While on-premise software was once considered to be a better option for vulnerability management and security, that misconception has largely been disproven. Storing data in cloud-based SaaS applications is not riskier than storing it on the premises. 

Generally, SaaS vendors apply top-tier technologies to protect client data (and in turn, their reputations). Still, your company should double-check those efforts and ensure that all compliance requirements are met. 

On-premise: As every IT professional knows, ensuring proper cybersecurity measures is a huge part of the job. Because on-premise solutions are hosted internally, you will need to set up your own security walls and barriers, have deep knowledge about compliance, and be able to detect potential malevolent actors before damage is done. 

If you do not have the internal resources to make this happen, you might be better served by a SaaS solution that has these capabilities built in already. 

Finding the right option for you: SaaS vs. on-premise 

Effectively assessing the benefits of SaaS vs. on-premise software is crucial when it comes to choosing the option that best suits your company. 

Every organization has unique goals, needs, and capabilities, and all of these factors come into play when you are deciding if you want to invest in a software solution that is hosted remotely or one that is hosted internally on company property. 

The software deployment method you should go with can also depend on the type of software you’re looking to implement. 

As you consider which option is right for you, you will want to consider the implementation process, accessibility concerns, budget comparisons, scalability and growth potential, maintenance needs, and security. In many cases, the right choice for your company depends on your resources and internal capabilities in each of these areas. 

For us, SaaS often wins out — that is why we built Atera to be a fully cloud-based RMM instead of an on-premise solution. But we encourage you to conduct thorough research as you make this decision. 

One of the best ways to gain a deeper understanding of SaaS vs. on-premise products is to test-drive a few of your top contenders. At Atera, we offer a 30-day free trial with no credit card required to make it simple to try out our platform. That is how confident we are that you are going to love it! Get in touch with our team today to learn more.