SaaS vs On-Premise for your Business


On-premises refers to the software technology that is located within the physical confines of any enterprise. Unlike SaaS or cloud computing services the on-premise service is located in the company’s data center or internal IT department. The main advantage of the on-premise system is that as it is installed on the hardware located within the company’s premises the IT staff has physical access to all the data of the company. Another major advantage is that the company can independently control and configure management and security of the software according to their use.

Software as a Service or SaaS is a type of cloud computing service in which software is licensed and delivered to a certain organization on a subscription basis and is hosted centrally. It is also sometimes referred to as “on-demand software”. This is a revolutionary new idea which eliminates the need for companies to develop and install their own software on their computers and datasets. This greatly reduces the expenses in terms of hardware acquisitions and software licensing and installation. Flexibility in payment plans, scalable usage, automatic software updates and accessibility and persistence are just some of the advantages of SaaS.


SaaS and on-premises have their own merits and demerits and it often becomes difficult for the companies to choose between the two. We have listed a few things that must be compared to make a choice between SaaS and on-premises.


If we look at the overall cost the SaaS is a lot cheaper than the on-premises system. SaaS offers you the pay as you go payment option which means that you only pay for what you are using. Also, you have the per user or per month payment options which make it a lot cheaper. The main disadvantage of the on-premises system is that it is a lot more expensive than the on-premises system. You have to pay the upfront capital cost for the hardware, software licensing, maintenance of hardware, office space, air conditioning etc.


When it comes to customization the on-premises system gives you the best options. As the whole control of the system is in your hands you can change it according to your will. As compared to on-premises the SaaS offers very limited customization which is often considered a downside by many organizations.


You don’t really need any hardware systems for the hosting of the software with SaaS because it is provided by your software provider and stays at the provider’s site as compared to this you will need hardware and system platforms to run software in the on-premises system.


As the data is accessed via the internet on SaaS, there are a lot of security risks involved, and cyber criminals can easily access your data. In the on-premises system, the data is located and stored in the company’s location making it more secure.

Mobile Access:

This is one of the major advantages of the SaaS system because the software can be easily accessed from your smartphone browser via the internet. The on-premises system rarely gives you this option and the functionality is often very limited in this case.


Both systems have their own pros and cons and the really depends upon the functions that you want. However, because of low cost, freedom of customization and mobile access the SaaS system is becoming increasingly popular in the companies worldwide.

Why Choose Pegas

We would love to help your business become more productive and to solve all of your Information technology needs for your company. Give us a call at (207) 835-4053 to get started today.

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