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blog | November 06, 2018

Differences Between SaaS and On-Premise

When looking for CRM (Customer Relationship Management) or ERP (enterprise resource planning) software, you will find that there are different ways of implementation, including on-premise and SaaS, also known...

By Courtney Perry

When looking for CRM (Customer Relationship Management) or ERP (enterprise resource planning) software, you will find that there are different ways of implementation, including on-premise and SaaS, also known as software as a service. Both types can help take your business to new heights, but it is up to you to decide which type works best for you.

Making that decision depends on what works best for your company culture and even your budget. Before making that choice, you will want to learn about the differences between SaaS and On-Premise in order to best help influence your decision. Let’s take a look at the key differences between the two to help determine which might be the best fit for your business.

  1. How They Are Implemented

The biggest difference between SaaS and on-premise is how they are implemented, or in the case of SaaS, how it isn’t implemented. SaaS is accessed via the internet, instead of having it installed and maintained through company hard drives. Your chosen SaaS provider manages access to the application, which includes performance, maintenance and security. Those who use SaaS, are able to access it through a web browser of their choice. On-premise implementation is not only different, but is a longer process. It features in-house installation – hosted and accessed on both company grounds and computers and cannot be accessed outside of company grounds.

  1. Do you want more freedom with your software or freedom from your software?

When hosting the software yourself, users have the ability to do customizations and make software changes. This type of freedom can be very beneficial for a growing business where changes might occur frequently or as the need for other CRM features and updates develop. With SaaS, businesses aren’t given much freedom simply because the software isn’t in-house. If your business is new (i.e. a startup) and doesn’t want to handle a dense and complicated software in-house, having its software provider handle all that comes with the software may be a more realistic choice.

  1. Consider Your Budget

Whenever you are looking to make a software change or update, it is important to establish a budget. One of the obvious differences between SaaS and on premise is the cost which is often the deciding factor. SaaS is on a subscription base, meaning your business will pay an ongoing subscription fee, typically for 12 months or longer. On-premise includes a one-time perpetual license fee. Which type of software fee best fits your current budget? Think about whether a one-time payment or an annual subscription fits into that budget and doesn’t cost more than what you can afford.

  1. Support and Maintenance

With on-premise software, the onus is on the software owner (specifically, the IT department) to maintain the upkeep of the software. That is a big responsibility for an IT department to have because of potential issues that could arise and having to work quickly to solve them. Security is also another topic for your IT team to handle. As opposed to SaaS, where the chosen software provider typically has stronger security measures and handles any tech issues. SaaS relieves your IT department of stress, especially if that department is small or simply doesn’t exist.

  1. Immediate Access or Not

The final difference between SaaS and on-premise is when and how often a user has access to it. Because SaaS is hosted by a provider and can be accessed with a browser and wifi, SaaS provides more opportunities to use the software, whenever and wherever. This is ideal for employees who travel often or work from home. On-premise can only be accessed on company grounds, which is convenient during the work day, but eliminates the possibility for users to have access at home or on the road. If you are making the decision between the two implementation styles, consider your employees, are they all working in the office? Do some travel? These are important things to consider before making a decision.

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