SaaS, On-Premise, or Off-Premise: Which is best?

As the shift toward a more digital world accelerates, many organizations opt for cloud solutions, Software-as-a-Service (SaaS) delivery, and licensing models to fulfill their software needs.

If you’re asking yourself whether a SaaS solution — where software is centrally hosted and licensed on a subscription basis — is the best option for your company, this article is for you. We break down the basics and pros and cons of SaaS vs. on-premise and off-premise solutions.

A Few Key Definitions

As you begin your journey towards finding the right software solutions for your business, you’re more than likely to encounter a few unfamiliar terms. To understand the SaaS vs. on-premise vs. off-premise debate, let’s quickly detail what each of these terms means:

What is Software-as-a-Service (SaaS)?

With SaaS, a cloud provider hosts your software applications centrally, and the software is made available to end-users (in this case, your employees) via a subscription model.

SaaS began as an alternative to traditional software, which required businesses to install and maintain typically expensive software packages locally. With SaaS, the end-user just needs an internet connection and a subscription to access the tools they need. As long as the software license is in place, the user can access the software via their internet browser.

It’s important to point out that the SaaS vendor retains ownership of the product and takes responsibility for the infrastructure needed to run it.

Popular SaaS products include Zoom, Grammarly, Google Workspace, Dropbox, Slack, and Canva.

What Is On-Premise Software Hosting?

With traditional on-premise solutions, a business purchases licensed software, which is then localized and hosted entirely on the business’ premises. The company manages and maintains all the stored data, servers, security, operating systems, and software applications in-house — usually at the company’s physical location.

What Is Off-Premise Software Hosting?

With off-premise software hosting, the software solution is hosted on dedicated hardware and infrastructure that belongs to a third-party vendor and is located in a different location to where the end-users work. The third-party company takes responsibility for the operation and maintenance of the hardware.

With an Off-premise system, administrators have the same, albeit remote, access to the servers as they would with an on-premise solution. This differs from SaaS solutions, where they are not responsible for maintaining the system’s back-end. It just happens to be located somewhere else.

Getting Started on Choosing the Right Solution

Now that we’re all on the same page with the terminology, it’s time to choose a software management solution that’s right for your organization. The first step is to take a long, hard look at your specific business requirements.

Here’s how to get the ball rolling:

Evaluate Your Current Situation and Future Needs

Suppose you’re looking for a new software hosting solution. In that case, it probably means one or more of three things: your business is scaling, your current software hosting solution isn’t fulfilling your exact needs, or you require new software and are weighing all of your options.

First off, ask yourself the following questions:

➡️ What are your software needs?

➡️ What is your budget?

➡️ What does your current hosting infrastructure look like?

➡️ If you have the infrastructure already in place, how easy/difficult is it to maintain?

➡️ Do you have a strong IT team?

➡️ Does your business run from one location, or do you have teams working remotely?

➡️ Does a one-time investment in software plus infrastructure and ongoing maintenance make sense, or are SaaS subscriptions better suited to your business needs?

It’s imperative to get answers to these questions before going any further. For example, if you have an IT team and solid hosting infrastructure in place, it probably makes sense to stick to an on-premise solution. If you don’t, SaaS or off-premise, third-party-supported solutions could be the way to go.

Evaluate Your Data

Before looking at new hosting solutions, it’s essential to evaluate your data storage needs. What is your current storage capacity? If you have your own servers, are they running at total capacity? How easy would it be to expand your existing infrastructure as your needs grow?

It’s also really beneficial to look at the cost of data storage when evaluating your needs. While generally more secure, on-premise solutions can be very costly. Keep in mind you’ll need to purchase and maintain your servers, allocate space, bring in a team of IT professionals, and cover electricity costs.

Once you’re clear on your data needs, you’re another step closer to finding the hosting solution that is a good match for your business.

Explore the key differences as well as pros and cons of the software solutions, so that you can make a truly informed decision for your business on PayPro Global’s blog.