ERP software model SaaS VS On-Premise




Analyzing the advantages, disadvantages and differences between SaaS (subscription) and On-Premise (sale of license/transfer of use) will be the key to making the best choice for our logistics operations and their digitization.

In this article, we will analyze the differences between the different modalities: SaaS and On-Premise. Implementing the best solution for our business can be a huge and overwhelming task for most companies. Knowing the differences, weaknesses and strengths of these will be essential to overcome the challenge of choosing the option that best suits the operations of our company.

To get to that point, we will clarify some of the crucial factors to consider in terms of Saas and On-Premise implementation.


What is SaaS and On-Premise?

The eternal doubt when you install an ERP, a WMS or any other software with the purpose of simplifying business processes, starts with whether to keep that solution In House (On-Premise) or under the In Cloud (SaaS) modality. The choice will determine the way you interact with your processes and the performance you get from the installed software.

SaaS, whose letters stand for “software as a service”, is an application solution hosted and maintained by a third party in the cloud. The Software as a Service modality is the one towards which companies currently tend the most and supposes the possibility of having software on time, paying only for it each time it is used.
On-Premise, is a system that is hosted locally on the customer’s own system and backed up by a third party to provide support should problems arise.

Now yes, we will address the essential differences that we must know between SaaS and On-Premise to implement the best choice.


saas vs. On-Premise, what is the best choice for you?

Today, the configuration option is unlimited thanks to today’s computing environment, which has two fundamental structures: On-Premise and SaaS (Cloud). Both have their own advantages and disadvantages. The key differences between these two are:


Depending on the type of accommodation

The most basic, and yet crucial, difference is the way hosting is done on both. In SaaS, the application is hosted on the providers’ servers and accessed through web browsers. While On-Premise, the application is installed locally on the company or user’s computer and servers.


According to budget

Price is a deciding factor for many companies and is a clear difference between these two solutions. For SaaS, pricing is on a subscription basis and is charged monthly, quarterly, semi-annually, or annually. While the On-Premise generally has a lower price than the SaaS lasting rate over time. The On-Premise rate depends on the size of the organizations and the number of units installed.

In such a case, we can say that in terms of financing the SaaS solution is OPEX (Operational Expenditure) and the On-Premise solution is CAPEX (Capital Expenditure).


According to type of support and maintenance

Based on this criterion, most users or companies prefer to implement SaaS, since with this solution the full responsibility for solving Software application problems rests entirely with the provider. While users who opt for the On-Premise, must have an IT department that can solve any fluctuations in the normal behavior of the application.


According to access

Having or not having immediate access at any time is also a decisive factor. SaaS has an application through which the user can access at any time and place. The only requirement to use it is that you must have a web browser and Wi-Fi. The On-Premise, however, has an application that can only be accessed through the company’s land. So users will not be able to connect from anywhere else.


As needed for software testing

An On-Premise application requires regular testing to ensure its correct operation, thus avoiding possible delays and errors. Due to this, with this solution the need arises to have the service of a tester. Whereas in a SaaS environment, this need is eliminated.


According to your level of security

It is essential that organizations have a strategy to be protected against certain disasters. For On-Premise users, backing up can be a significant challenge, as in-house systems can be relatively expensive and require additional investments, security, and licenses. However, SaaS offers an all-encompassing advantage, as it can perform backup of different types: from simple data storage to even complete failover that allows full transfer of functions.

In short, through the analysis of these differences, we will be able to choose the best option to implement in our operations in a more strategic way. SaaS or On-Premise, the path always leads towards digitization.

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