On Premise vs. SaaS (Software-as-a-Service)

Choosing between on premise vs. SaaS (Software as a Service) solutions is a critical decision for organizations. It’s important to understand the differences between each solution and how each option could optimize operations, security, and budget. This article delves into the key differences between these two deployment models, providing insights to help you make an informed choice.

In this blog post, we’ll address the need for on premise vs. SaaS platforms. Be sure to also read Part 2, where we discuss the difference between on premise vs cloud DAM.

Understanding On Premise vs. SaaS Solutions

What’s the difference and why is it important? These represent the two primary deployment options for buyers and each has its own criteria for suitability.

On Premise Solutions: These involve installing and running software on the organization’s own infrastructure and servers. The organization is responsible for managing the entire process across setup, implementation, and maintenance, including purchasing IT infrastructure and employing IT staff to upkeep systems and troubleshoot errors.

SaaS Solutions: SaaS is a cloud-based software delivery model where applications are hosted by a third-party provider and accessed by users over the Internet. Unlike on-premise solutions, there’s no need to install or maintain the software on in-house servers—everything is managed by the cloud provider, including updates, security, and scalability.

Key Differences Between On Premise vs. SaaS Systems

1. Implementation and Accessibility

• On Premise: Implementation requires purchasing and setting up hardware and software on-site, leading to longer deployment times. Accessibility is typically limited to within the organization’s network, potentially necessitating VPNs for remote access.
• SaaS: Implementation is generally simpler, with applications accessible via web browsers, eliminating the need for extensive hardware setup. This model supports remote access, enabling users to work from anywhere with an internet connection.

2. Cost Structure

• On Premise: Involves significant upfront costs for hardware, software licenses, and ongoing maintenance. Organizations are also responsible for infrastructure upgrades and IT personnel expenses.
• SaaS: Operates on a subscription-based model, reducing initial expenses. The provider manages maintenance and upgrades, often resulting in a lower total cost of ownership.

3. Scalability

• On Premise: Scaling requires additional investment in hardware and infrastructure, which can be time-consuming and costly.
• SaaS: Offers flexible scalability, allowing organizations to adjust their usage plans as needed without significant investments.

4. Maintenance and Support

• On Premise: The organization’s IT team is responsible for all maintenance, updates, and troubleshooting, necessitating a dedicated support structure.
• SaaS: The provider handles maintenance, updates, and support, freeing internal IT resources for other tasks.

5. Security and Compliance

• On Premise: Offers greater control over data security, which can be beneficial for organizations with stringent compliance requirements.
• SaaS: Providers implement robust security measures and comply with industry standards, but organizations must trust third parties with their data.

Making the Right Choice On Premise vs. SaaS Platforms

The decision between on premise vs. SaaS solutions depends on various factors, including budget, scalability needs, IT resources, and security considerations. Organizations seeking control and customization may prefer on premise solutions, while those prioritizing flexibility, cost-effectiveness, and ease of access might opt for SaaS.

By carefully evaluating these aspects, businesses can select a deployment model that aligns with their strategic objectives and operational requirements. Let’s break it down for you with the example of a DAM system.

An on premise DAM solution is installed on your organization’s hardware and is managed, maintained, and updated by your IT department. Your internal IT team will also be responsible for all support, along with the research and implementation of any new features.

On Premise DAM Platform

An on-premise solution is most suitable for organizations that:

• require specific integration needs,
• have IT bandwidth and expertise to manage the system and associated activities,
• have resources to set up customizations,
• are equipped with sufficient hardware to meet scaling needs, and
• can support regular backups.

An on premise DAM tends to be costlier, as it requires hardware and regular dedicated support from the internal IT department to manage the system.

In addition, organizations that implement an on premise DAM will be responsible for backups. Because of this, there will almost always be capacity underutilization that results in a higher total cost of ownership than a flexible cloud-based model offers.

It’s also important to consider the needs of the departments who will use the system. Communication between Marketing and IT, for example, may prove to be challenging as each group has its own processes and working styles. Marketing may have issues highlighting the challenges they experience or logging requests that are in the proper format and terminology for the IT team to understand and produce.

SaaS DAM Platform

A SaaS DAM solution is hosted in the cloud by a service provider and typically includes a set-up fee and a monthly or yearly subscription fee that corresponds to the storage and user requirements of each organization. SaaS DAM features are usually configurable, but not customizable. The provider is responsible for storage, updates, and back-ups, meaning there are no internal hardware or software requirements for the buyer.

It’s important to highlight though, that the DAM is not completely hands-off for the organization, and requires on-going management that includes branding; setting up keywords, metadata, taxonomy; and being diligent with organization and routine cleanup.

A cloud-based solution is most suitable for organizations that:

• employ geographically-dispersed creative teams that communicate and work on shared assets,
• require the ability to scale asset storage and users on-demand,
• do not want to strain IT resources, and/or
• desire specialist support.

Which One is Right for You?

A shorthand way of determining whether an on premise vs. SaaS solution is more suitable for your company is to gauge where your priorities lay on the three ‘Cs’:

• Cost
• Customization, and
• Complexity.

Generally speaking, an on premise solution is higher in all three. Reviewing your current set up and understanding your priorities in these terms will help you with this foundational DAM decision. To learn more about DAM and considerations for enterprise companies, download our eBook “The DAM Buying Guide“.