On-premises Vs SaaS. What is best for you?

What are the key differences in SaaS vs on-premise software? This is a very common question most companies are asking themselves as they begin their journey in the HR software buying process. Traditionally, companies licensed enterprise software and then implemented it “on premise” – their own or controlled physical location – and provisioned the hardware, infrastructure, and support to set it up and maintain it for employees. SaaS (Software-as-a-Service), on the other hand, is software that is owned, delivered and managed remotely by one or more providers. The provider delivers software based on one set of common code and data definitions that are consumed in a one-to-many model by all contracted customers at any time.

Which one is better? That usually depends on many factors. Here is a look at few characteristics of each type of software.


First, the size and regulations that are in place in your organization will not always allow you to explore outside of on-premise. Governments, industry ruling bodies or clients sometimes mandate where data can be physically held/processed. Most SaaS vendors tend to be US-based, and may not have data centers exactly where you need them. Depending on your business requirements, this might mean you need to go on-premise.


SaaS has grown in popularity within small and medium sized companies in the recent years due to its simplicity and low upfront costs. With SaaS, you pay for what you need, no need to buy hardware to host your new applications. Instead of provisioning and using scarce internal resources to install and maintain the software, the vendor provides all the hardware and implementation services and performs much of the work to get their software working for you.


If you have an IT department on staff, on-premise software is more customizable than SaaS because vendors usually build more comprehensive software development kits (SDKs) for these systems. On the other hand, many SaaS providers will go the extra mile for their customers and implement software updates with new features to suit your needs at little or no cost to you.


Security is also a big factor in the decision between on-premise and SaaS. Although there has been some uncertainty in the level of security of SaaS, the likely truth is that the software vendor has a much higher level of security than the customer’s enterprise itself would provide. However, for certain situations and types of data – think national security or bank data – the on-premise solution offers full control of all aspects of security. These organizations can customize and build systems to meet their specific security requirements. If you own and operate a Small or medium business that doesn’t hold any area 51 secrets, your SaaS provider in most cases will provide you with more than enough security.


Finally, SaaS is software you use the internet with a web browser. A key advantage of web-based software is that all your data is centralized and accessible over the web from any computer at any time. You can get to it from anywhere, all you need is an internet connection. This flexibility does not exist with on-premise systems.

To conclude, SaaS software has come a long way. It has proved that it is able to do what on-premise software can and much more! Although the SaaS HR market is in full growth, the on-premise solution will still have a pulse. Hopefully, now you will have a better understanding of both options and make an informed decision on which solution would be better for your organization based on your needs.