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Digitise or die – SaaS vs on-premise solutions

The way in which organisations consume technology has changed significantly compared to the 80’s, 90’s and early 2000s. Organisations demand flexibility, stability, cost savings and predictability. This is a digital age with one simple choice: digitise or die.

Software is crucial to the digitisation process, with far-reaching implications for the organisation. For this reason, choosing the right software consumption model can be daunting for IT professionals who must weigh up Software-as-a-Service (SaaS) and on-premise software solutions in the context of other infrastructure considerations.

SaaS is a subscription model for licensing services or software hosted remotely and accessed by the customer via the cloud. On-premise solutions refer to systems, software and applications which are deployed on infrastructure (usually a data centre) located on the customer’s physical premises. Both models have advantages for organisations; how do you determine the best solution for yours?

Pitting SaaS against on-premise solutions is probably over-simplifying the complex decisions involved in finding the optimal software consumption model. You need to carefully consider all the elements of your unique requirements to find the best solution for you. It is important to establish a clear understanding of your current and future needs as well as the expectations of your organisation (usually from executive management), employees and customers.

SaaS has taken off, with total SaaS spend expected to exceed $715 billion by 2028. Considering that total SaaS spend was $114 billion just two years ago, this growth rate is phenomenal.

SaaS is a popular choice due to compelling benefits offered by cloud-based offerings:

  • SaaS applications allow subscribers to purchase only what they need, with the option to add or subtract licenses as those needs change. This flexibility results in cost efficiency and lower costs of ownership over time.

  • The software is hosted by the service provider, which means there are minimal infrastructure requirements, and this simplifies adoption and integration.

  • SaaS can be accessed with any type of device, and many offer exciting customisation options using application programming interfaces (APIs).

  • The service provider handles all upgrades, patches and enhancements, as well as basic security. With all this in place, there is no action required from subscribers - they simply continue to use the software, confident that they are using the latest version of the software and that it is secure.

On-premise solutions are often owned or licensed by the organisation, which is also the primary custodian of data associated with the product. They often require custom integration and specific technical specifications. Probably most significantly, lifecycle management is the responsibility of the customer, who will need to schedule upgrades and maintenance.

Checklist to help make the right choice for your business

  1. If you are considering SaaS, it is crucial to get clarity on how the product will be used to ensure that the pricing bundle addresses all your needs. Look out for features included in the price that you don’t need or features you may want to activate later on.

  2. The service level agreement (SLA) needs to clearly articulate the vendor’s responsibilities and commitments. Negotiate the SLA to ensure that terms best meet your needs.

  3. When comparing SaaS and an on-premise solution, evaluate whether the comparison is a fair one. It is possible that the SaaS version of a product has different features and capabilities to its on-premises version.

  4. Finally, you need to investigate and be satisfied that a SaaS vendor is financially stable, has business continuity plans and data backup contingencies. Your data is likely to be stored remotely, so you need to consider and be clear on the consequences of a cyberattack, bankruptcy or unexpected disaster.

Regardless of whether your chosen solution is on-premise or SaaS, talk to us to help you ensure that your organisation enjoys real-time discovery, monitoring and management of your IT estate. We can help to ensure alignment with budgets, your ICT strategy and your business objectives.

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