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SaaS or On-Premise: What’s the Best Deployment Model?

SaaS On-Premise

SaaS & On-Premise

Since the emergence and expansion of cloud services, a question has arisen in organizations: Which is the best model of software installation, SaaS or On-Premise? Although it is not easy to give a categorical answer, we will try from these lines to put clarity on an issue in which increasingly more organizations must make a decision.

Before proceeding, a simple description of each of the models. The base of the SaaS model (Software as a Service) is the fact that the software is hosted in a cloud infrastructure. To access it (usually through a web browser), organizations pay a monthly fee. On the other hand, in the On-Premise model, the installation of the software is done in the company’s own servers or computers. A license to use the software is paid for, generally at once. In some cases, an annual fee must be paid for application’s updates and upgrades.

In the table below we will analyse some aspects of both models, in relation with the organization, comparing them with each other:





Low cost of entry. Flexible pricing schemes. Few internal resources needed for support. Low upgrade costs.

High cost of entry due to the material (infrastructure & hardware) and human resources needed. Low maintenance costs. High upgrade costs.


Highly security environment, at vendor’s charge.

Additional resources could be needed (dedicated software and/or IT security specialists).


Fast in time, as the software/application is tested and evaluated by the service provider.

It takes longer, as the software/application must be installed and tested for the particular environment of the organization. More human resources needs. Additional applications and new hardware may be needed.


Customization may not be possible if the software/application is used by many organizations (multitenant)

Highly flexible.

Support and maintenance

Minimal organization’s involvement. Those tasks are on provider’s charge.

The enterprise is completely on charge. The underlying data availability is under IT staff responsibility.


Limited involvement.

The organization is responsible for apply the upgrades. It’s time and resources consuming.

So, What’s the Best Model?

According to what we have seen, we can say with some degree of confidence that, for small and medium-sized companies, the SaaS model is highly convenient. Above all, it is about cost and security. Regarding this last point, let’s not forget that cybersecurity is a hot topic, so a good protection is very important.

Finally it is important to remember that you should always analyze each particular company. As each has different characteristics and operates in different industries, a “one-size-fits-all” model cannot be applied automatically. Factors such as the provision of human and technical resources, the importance of the data to be stored, the budget available and the regulatory and legal restrictions must be taken into account before deciding on a particular model.

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