The biggest difference between SaaS (Software as a Service) and on-premise is how they are implemented, or in the case of SaaS, how it isn't implemented. SaaS is accessed via the internet, instead of having it installed and maintained through company hard drives. SaaS is fast becoming regarded as a better option than the on-premise software licensing model. This is due to its flexibility, reliability and security whilst freeing up time, money and resources to allow you to focus on your core business. Here, we look at some of the key differences between the two models.

  SaaS On-Premise Software Licence
Access SaaS is hosted by a service provider and can be accessed with a web browser and wi-fi instead of having it installed and maintained through company hard drives.

This means it can be used wherever and whenever without you having to be connected to your work IT infrastructure.

On-premise software implementation takes longer due to the time needed to complete installations on servers and each individual computer/laptop.

There are also likely to be time delays associated with internal IT provisioning of software and hardware and also due to competing projects for your IT department's time.

Maintenance, Upgrades and Security Cloud software is hosted for you; you don't need to worry about the maintenance of your software or hardware. Compatibility and upgrades are taken care of by the cloud service provider.

SaaS providers employ security measures beyond the affordability of most businesses, therefore your data is often safer in the cloud than on a server in your offices.

However, as you are entrusting your data to a third party, it is key that you carry out due diligence on the service provider to ensure your data will be safe.

With on-premise software, the onus is on you (specifically, the IT department) to maintain the upkeep of the software. Security will also have to be managed by the IT department.

On a plus side, you control upgrades and have much greater flexibility to customise the software to your specific requirements.

Costs SaaS is priced on a subscription basis, meaning your business will pay an ongoing annual and/or monthly subscription fee. On-premise includes a one-time perpetual license fee at the start of use. If cash flow is an issue then a large up-front cost may be prohibitive.


Originally published 24 April, 2020

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.