On-premise vs cloud: which option is better for your company?

Published on 26/02/2020 by Sonia Navarrete

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Last Saturday Tyson Fury beat Deontay Wilder, winning the World Boxing Council (WBC) heavyweight crown. Boxing is a more complex sport than it looks like – behind every punch, there is a carefully crafted strategy to beat the opponent. 

on premise vs cloud

If you have ever watched a boxing match you will understand how it feels when you have to choose software for your company for the first time – when you are looking to make a decision for the first time it can feel a bit like being in a boxing match, two opponents in the ring looking to win.

You then find yourself having to make a decision between software-as-a-service (SaaS) and on-premise, and most of the time don’t understand what each does – or which one is more suited to your business.  Do I need it to be hosted in the cloud or in my premise? Do I want to pay a one-off fee or a subscription? Do I want to have full control over it or should it be handled for me? 

Implementing new software is not an easy task. Today there are a number of options available in the market, both on-premise and SaaS, and can get a bit overwhelming when deciding which one is better suited for your business. In this article, we’ll look at both and examine the advantages and disadvantages of each one. 

On-premise vs cloud: What are the differences?

SaaS is defined by Gartner as “the software that is owned, delivered and managed remotely by one or more providers.” 

This means that the software is not physically at your office and is hosted in the cloud. The software provider offers users the infrastructure and the applications that they will need to perform the work. In a nutshell, you only need an internet connection to log in and access the applications needed (CRM, ERP, etc) via the internet. This option is normally subscription-based (usually 12 months).

On-premise software is installed on a company’s on-site servers and requires the company to purchase the license to use it, normally this is a one time fee. A good example of this is Microsoft Office, you can purchase the license to use it and store it on your internal servers. Traditionally this was the only option you had but a few years ago, Microsoft launched Office 365, the cloud version of the Office package, giving customers two options.

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The right option for your business

As previously mentioned, when looking to implement new software, this being CRM, ERP or any other, there are normally the SaaS and the on-premise options. It’s important to be aware of the advantages and disadvantages of each one before making a decision. As it will depend on the needs of your business as well as the longer-term usability.

Below we have listed the main factors to take into consideration when deciding between on-premise and SaaS.

Implementation 

Both differ greatly in how they are installed and the resources needed. For example, the implementation of cloud-based software is faster since there isn’t hardware to be installed and you just need an internet connection. You only need to pay a monthly subscription and you are practically ready to go since the support and the hosting is provided by the vendor.

Installing on-premise software is a long process as you need to make sure it is installed and in all the company computers – this also means it can’t be normally accessed outside the company grounds.  

It’s worth taking into consideration the long term implications, for example, if you’ll need to access applications outside the office, a cloud-based option is a better choice as it can be accessed outside the office by many devices.

Maintenance

Typically, on-premise software installation requires an internal IT team that can take care of the installation and maintenance of the software, something that is not needed with the SaaS option as this is handled by the provider and included in the subscription. 

 It’s important to take into account your company’s internal resources, as it will directly affect the installation and maintenance of the software.

Cost

Perhaps one of the most decisive factors when choosing software. The key differences are that with SaaS you will be paying a 12-month subscription fee as opposed to a one-off fee to purchase a license for on-premise software. 

Security

This is linked to hardware access since on-premise software could be breached through physical means such as people breaking into your offices or through digital techniques such as phishing.

With SaaS, this is managed by the provider at the cloud. Both on-premise and SaaS options can be vulnerable to attacks, but cloud providers take strict measures to ensure that data is not just in one place. Cloud providers such as Amazon Web Services (AWS), Google or Microsoft don’t have its data centres in just one place, they spread them in different locations, called regions. This means that within those regions they have a number of data centres, ensuring that the client data is not just in one location.

So if this was a ‘SaaS vs On-Premise’ match, you know that the ultimate goal is to make a decision but you need to be very strategic in each round to make sure you win the round and the match by choosing the right software for your company.

Choosing software can be a daunting decision, and there are many factors to take into account such as your resources and also your long term goals. We have over 800 software categories on our site, from CRM to ERP Systems and HR software.

What has been your experience so far when choosing software? Leave a comment below or tweet me at @SoniaNM55, I look forward to receiving your questions!

This article may refer to products, programs or services that are not available in your country, or that may be restricted under the laws or regulations of your country. We suggest that you consult the software provider directly for information regarding product availability and compliance with local laws.