The difference between an on-premise and SaaS solution

1. Using the server

One of the main differences between on-premise and SaaS is which server you use for the software. On-premise means “on location”. If your company opts for an on-premise package, this means that the software is installed on your server. Since the software is on your server, your company is responsible for security, management, and availability. In practice, this means that you need your own IT department. However, the supplier of the software usually still offers maintenance services after implementation. Things are slightly different if you opt for a SaaS solution such as our service and maintenance software. The solution is no longer installed on your server but is on the supplier’s server in the cloud. It automatically means that the supplier of your SaaS package is responsible for security, availability, and management. In general, you no longer need your own IT department for this.

2. The price structure of the software

Another difference between on-premise and SaaS is the pricing structure. If you opt for on-premise software, you purchase a one-time license for the software. Then you pay periodically for service and maintenance. The price is usually a fixed percentage of the license. So for an on-premise package, you make a high investment, which generally represents a higher risk. With a SaaS solution, you pay monthly for the use of the software in a subscription form. Service and maintenance are already included in this price, so you don’t have to make a one-time, high investment. The difference in price structure does not mean that one of the two is more expensive than the other after several years.

3. Availability at the office, on the road, and at home

As mentioned before, on-premise software is installed on your server. It also means that you can only consult the software via the computers in the office. Your employees often do not have access to the system at home. With a SaaS, things are slightly different. A SaaS solution is in the cloud so that you can access the system anytime, anywhere with any device. Your employees work uniformly in the office, on the road, and at home.

4. The differences in scalability

On-premise and SaaS also differ in scalability. In general, it is more challenging to make an extension or adjustment with an on-premise package. If you choose it anyway, it often has consequences for your hardware. For example, you may need to purchase and set up new servers. A SaaS solution, on the other hand, is relatively easy to extend or adapt. You can easily add or deactivate functions. In addition, you can quickly scale up or down the number of employees who use the system. You never pay for something you don’t use.

Difference between on-premise, IaaS, PaaS, and SaaS

In addition to the option for on-premise and SaaS, you also have the option to opt for IaaS and PaaS. The first thing you notice is that – except on-premise – they all end in aaS, which means “as-a-Service”. As a user, you pay for your need for a service or solution. If you choose IaaS, Infrastructure-as-a-Service, it means you purchase the infrastructure on which the services run from an external provider. You pay for an empty server room, and you are responsible for configuring and maintaining this environment. Costs of IaaS are lower than SaaS, but you need technical knowledge to set up and maintain the server.

Do you choose PaaS? Then the external provider takes care of the setup of the server, such as the Operating Systems and the middleware. With a PaaS solution, you outsource the hosting, and you only have to deal with the software on the platform. PaaS is fascinating if you do not know to maintain the infrastructure. Still, it can be a disadvantage that it is determined for you which software and middleware are used. We have made the table below to adequately explain all the differences between on-premise, IaaS, PaaS, and SaaS.