6 Reasons Cloud-Based SaaS is Better than On-Premise

When choosing a new solution to help manage some aspect of their business, one of the first things a decision maker needs to identify is whether they prefer a SaaS solution or an on-premise solution.

SaaS solutions are hosted in the cloud and accessed via the internet, whereas on-premise solutions are installed and run on the computers of the people or organization using the software.

SaaS solutions were first introduced during the 1990s, but major players really came into the market around 2003-2005.

During this time, the majority of users were early adopters. The biggest barrier of adoption was concerns of the security of their data in the cloud. There was a similar issue with consumers reluctant to give their credit card details to Amazon. As security measures improved and more vendors entered the space, consumers became more comfortable with SaaS. Around 2010 is when the SaaS market really began to grow, both in number of vendors, and in consumers. Despite security concerns, the rate of adoption of SaaS software is growing every year. In 2017, a Forbes article, ‘Five reasons why switching to SaaS will be the best investment you make this year’ outlined Costs, Maintenance, Space, System Upgrades & Customizations, and Time Management & Performance as the main supporting reasons to adopt SaaS for your business:

1. Cost - The Initial cost of SaaS is generally lower than on-premise. You don't have to buy and store hardware, you only need a browser and access to the internet. Since there is no hardware that also reduces the time investment as well. The time investment has to be taken into consideration, including that for installation, training, and usage. Both systems will offer trainings and you need to carefully evaluate the options.
2. Maintenance - Again, no hardware means less headaches. You don't need a room in your office to store the equipment and nothing needs to be replaced, serviced or physically upgraded. Cloud can also offer automated regular backups of your data. The hardware is where it should be, with the experts that know how to take care of it. If there is downtime you don't need to spend time on the phone with a support team relaying intructions on how to check the hardware, just let the supplier know there's an issue and let them fix it for you.
3. Personnel - On-premise solutions require a dedicated IT team who will need to spend a lot of effort (time and money) maintaining the solution as well as running regular check-ups to avoid downtime. Regular backups need to be performed, as well as full disaster recovery tests to ensure no corrupted data is being backed up. The cost of ventilation and repairs of servers and hardware must also be accounted for.
4. Space - Physical space which is properly maintained for servers, hardware, and an IT team are required for on-premise solutions. Cloud-based solutions do not require such extra space. Users are not saddled with the responsibility of server security, only with security of their own entry point devices.
5. Upgrades, Bug Fixes & Customizations - SaaS upgrades are quick, seamless and are done by the vendor, they are also typically included in the subscription cost. This makes it easy to always be using the most up-to-date version without any re-implementation or re-customization of any preset features. Any issues can be addressed and updated immediately.
   On-premise solutions often run into the issue of customizations being linked to the current software deployment. It is not always possible for customizations to be portable with future versions. Also, when it’s time for the system to be upgraded, IT teams have to test all customizations and redeploy the system across users’ computers. Some on-premise solutions also require additional payment for version upgrades.
6. Time Management & Performance - SaaS deployment time is typically significantly shorter than that of on-premise solutions. SaaS solutions also make it very easy to deploy across multiple regions, subsidiaries, and divisions in addition to avoiding the costs of these rollouts. It is also easy to add more users to SaaS solutions as the business grows. They are also built to ensure maximum network performance and are adaptive to the business’ needs.

With on-premise solutions, the speed and performance of the solution relies on in-house servers. Meaning, as the business grows it will outgrow the servers’ capacity and will require more resources or more hardware to support demand.

One final and quite important benefit of SaaS solutions is accessibility. SaaS solutions can easily be accessed when you are out of office at any point on the globe, all you need is a browser and internet access, or if the vendor supports it, a mobile app or a progressive web app (PWA).

Finances Online also outlined why businesses are shifting to the cloud:

"In a nutshell, SaaS solutions are more cost and time efficient, making them more affordable and accessible to businesses of any size. They shoulder the burdens of security, availability, and performance instead of the users."