The recent economic recession has re-ignited the Software as a Service (Saas) vs. On-premise solution debate as organizations are under pressure to switch to cost-effective solutions. With Cloud Computing gaining a lot of media attention in the recent times, many organizations are now contemplating the Go/ No-Go decision to switch to a SaaS model from an on-premise model. The decision becomes all the more important when the application in question is a Project Portfolio Management (PPM) system as PPM systems involve significant investment and time. We here at EPM Live offer both PPM deployment options so the question remains….which one is right for you? Before we get into the details, if you are interested in learning more about SaaS PPM and whether or not it’s right for you, please join us for our upcoming webinar on PPM SaaS and we will guide you through the right questions to get your answer. EPM Live provides an award-winning project software portfolio to meet any and all PPM needs.
Let’s get to the details. The on-premise approach is a time-tested philosophy with proven success across many verticals. It dates back to the origin of computers and therefore, it’s often known as the traditional or legacy software approach. In contrast, the SaaS model came into existence much later. The two delivery models are remarkably different from each other and understandably, each has its own pros
There is no One size fits all approach in software so it’s illogical to assume that the SaaS model is perfect for all kinds of requirements. Whether to take the plunge to a SaaS solution or whether to continue with an on-premise solution depends on a large number of factors.
This article provides a high-level comparative analysis of SaaS vs. On-premise solutions and provides a list of advantages and disadvantages of each model in order to aid organizations to take an educated decision to choose the best model for their needs.
Advantages of SaaS Model
1) Lower entry cost – SaaS is a no-frills model therefore it offers a much lower entry cost as compared to an on-premise solution. In fact, in many cases, SaaS solutions are a fraction of the cost required to procure, deploy and manage an on-premise solution. You pay for what you use and for nothing else. In many cases we are also finding that even if you do choose an on-on premise model, SaaS is sometimes utilized to proof out the concept before moving in-house.
2) Lower TCO – SaaS solutions are reasonably free of maintenance. There are fewer deployment hassles (if any) and no hefty maintenance costs. SaaS reduces both Capital Expenditure (Capex) as well as Operational Expenditure (Opex) thereby boosting the overall savings to an organization.
3) Faster Time to Market – SaaS solutions leverage a ready-made platform which has already been provisioned, implemented and tested by your solution provider. Therefore, you can get started with developing your application on top of the provider’s platform and get your product out to market quickly. SaaS further simplifies provisioning and reduces deployment complexities. A faster time to market implies quicker ROI.
4) Flexible Pricing – Most SaaS vendors offer flexible subscription pricing models which do not burn your pockets. As your enterprise grows, the SaaS solution can be scaled up accordingly and just in case your enterprise shrinks, the SaaS solution can be scaled down accordingly. And the best part is that you are never stuck with oversized infrastructure and unused resources. SaaS offers a dynamic approach to managing computing infrastructure and resources.
5) Lower Risk – Your SaaS vendor takes care of infrastructural risks and ensures high-availability for your organization’s needs. Implementations are faster and involve fewer risks as they are handled by professional experts.
6) Very Secure – SaaS solutions are extremely secure. Security is one of the top concerns for any SaaS solution provider and they have a reliable and secure infrastructure in place for varied customer needs. For an on-premise solution to match the security of a SaaS
solution, it requires a major investment.
Disadvantages of SaaS Model
1) Internet Dependency – It’s fair to say that internet is the lifeline of SaaS solutions. No connection, no application – as simple as that. Further, if you have a patch internet connection, it can result in spotty application performance. Further, the internet comes with a Pandora’s Box of vulnerabilities and security issues.
2) Relinquishment of Control – Many organizations do not feel comfortable with the idea of relinquishing control to a third-party vendor. Trust is a crucial part of SaaS approach and it’s not the easiest thing to build in this world. Another vendor hosting your invaluable data and precious applications? It’s a mental block and a big one.
Advantages of On-Premise Model
1) Total Control – Contrary to a SaaS model, an on-premise solution offers you total control over your application. All your sensitive data is stored internally and there’s no need of exposing it to a third-party vendor.
2) Higher Sense of Ownership – Since you purchase the infrastructure and resources for an on-premise solution, it offers a higher sense of ownership as compared to a SaaS solution.
Disadvantages of On-Premise Model
1) Costly Affair – On-premise solutions have higher entry costs as well as higher operational costs than their SaaS counterparts. You own the infrastructure but then you pay a hefty sum for it as well.
2) Maintenance Hassles – You own it, so you maintain it – as simple as that. It’s your responsibility to maintain, upgrade and scale the solution as and when required and it’s definitely not the easiest job in the world to do so.
The decision whether to go the SaaS route or to stick with the time-tested on-premise solution is not an easy one. Further, it largely depends on an organization’s needs. However, for organizations looking to overcome the entry barrier and achieving a lower
TCO, it’s definitely worth trying out the SaaS approach.