Understanding the Differences Between Cloud, SaaS, and On-Premises Software Deployment

As a provider of enterprise resource planning (ERP) software solutions through the cloud, we are often asked, “What is the difference between the cloud, SaaS, and on-premise solutions?” There are key characteristics that set them apart. Here, we clarify what each term means and how they differ:

What is the Cloud?

The cloud is the virtualized infrastructure that delivers access to online computing power. Typically, large servers are in off-site data centers. This relieves companies from the responsibility of buying, managing, and maintaining physical servers or running software applications on their computers.

Through the cloud, you can access the following:

Infrastructure as a Service (IaaS) provides data storage, processing, memory, networking, instancing, and other computational infrastructure resources. In the cloud, these resources are delivered similarly to those on-premise. It's here where businesses and individuals run various types of software on the infrastructure, including operating systems and application solutions.

Platform as a Service (PaaS) – This cloud computing service supports deploying different software applications, including programming languages, libraries, and tools, and for database setup and maintenance, Internet of Things (IoT) support, business analytics, and intelligence.

Software as a Service (SaaS) – This service allows consumers to access a provider's software applications through a cloud infrastructure. SaaS solutions are accessed using a web browser or a program delivery interface. Consumers don't manage cloud networks, servers, storage, or operating systems other than a limited set of configuration settings.

SaaS defined

This is one of the most popular ways of delivering software as a service (or subscription). It involves licensing and online access rather than direct installation into on-premise servers and local computers.

Software as a Service (SaaS) minimizes the upfront costs and time to utilization. Since servers and hardware do not have to be purchased, installed, and configured, businesses and their users can access the software online right away through a variety of devices. Companies can buy user licenses to access the software on any PC, laptop, tablet, or mobile phone. The vendor maintains the software, including continual performance monitoring, keeping it up to date, backed up, and secured from cybercriminals. SaaS offers economies of scale, making this one of the more affordable options. Typically, adding new users is easy, so companies can scale their licenses up or down as needed.

A reliable and robust internet connection is essential to SaaS performance. SaaS offers less control than on-premises solutions for some larger companies that want control over their software and data and how they are stored and protected.

On-premise, the traditional software deployment

In-house or on-premise servers are the traditional and time-tested way of deploying computing tools. With this server method, the servers and hardware are located on the premises. Most organizations have migrated to the cloud, but some prominent organizations with larger IT resources choose on-premise servers to maintain control over security, performance, software features, users, security, updates, and maintenance.

Not every business has the financial resources for on-premise servers and the required security. To do so, organizations need to buy and install servers and hardware, some of which will become obsolete over time. They also need to pay for software and installation upfront since subscription models aren't available for on-premise. Security, backups, maintenance, and updates are also the host company's responsibility. There is always the possibility of software-hardware incompatibility in the future once you have purchased hard assets. Many software vendors may not continue to offer software for installation on-premise. Additionally, on-premise solutions are harder to access from mobile devices safely, and performance degradation may occur as software becomes more powerful.

We hope these explanations help gear you towards the solution that works best for you. Have an additional question about which method is right for your organization? Contact our support team today!