When it comes to buying/using an application, there’s always some question about SaaS vs On-Premise model. There are many different parameters that a company has to take into consideration before making a decision. Below are a few such questions that pop-up.

Why are enterprises moving to the cloud?

With the expansion of the internet in the last couple of decades, everything is moving to the cloud at lightning speed. The major contributor to this cloud adoption has been Software as a Service (SaaS) applications. IT companies worldwide are adopting SaaS solutions as a part of their work environment. Some of the main reasons for this move are reduced cost, ease of accessibility and faster on boarding process so it goes without saying that Multi Factor Authentication is a need of the hour for these applications. 

How is the adoption of SaaS applications worldwide?

By the end of 2020, 41% of work would be done on the cloudBy the end of 2020, 41% of work would be done on the cloud
71% of businesses are deploying cloud-based SaaS to enhance IT service delivery speed By the end of 2020, 41% of work would be done on the cloud 71% of businesses are deploying cloud-based SaaS to enhance IT service delivery speed
73% of organizations indicated nearly all of their applications will be SaaS by the end of 202073% of organizations indicated nearly all of their applications will be SaaS by the end of 2020
(Stats Source: https://99firms.com/blog/saas-statistics)

How Is On-premise Better Than Cloud in Terms of Security and Data Protection? 

While this does sound exciting, security as well as data protection are becoming topics to ponder when thinking of SaaS applications. The amount of sensitive data and documents hosted on the cloud will also increase greatly. It is for this reason that some organisations dealing with very sensitive data always want their applications to be in house or on-premise. On-premise applications provide numerous advantages in terms of security, flexibility, and customizations.

How to Choose Between Cloud and On-Premise Solutions

When it comes to choosing an application from an external service provider, there is always a question of whether to opt for a SaaS model or to go for an on-premise setup. Both of these come with their benefits and drawbacks. Some of the major differentiating factors of these two modes are highlighted below.

How does the cost compare between SaaS and On-Premise applications?

Most SaaS providers have a subscription-based model allowing the customer to choose what they need. This in turn allows the customer to start using the service at a pretty low cost. However, over a longer period, this can scale up very fast.The initial investment for an on-premise deployment is quite high as it requires purchasing hardware, hiring people to manage and monitor it, etc… But for the longer run, it becomes very cost-effective as there are no recurring expenses associated.

What type of infrastructure is needed for SaaS and On-premise applications?

Since the service is cloud-based, it requires zero infrastructure and the entire infrastructure is maintained by the service provider. In the scenario where the provider’s infrastructure is not sufficient enough to satisfy the client’s business needs, it can be very cumbersome for the client (e.g. data retention or data processing capability).   An on-premise application requires a complete infrastructure setup. This involves having good hardware, network capabilities, and also the human resources to maintain it. This comes as an advantage for a resource-intensive application where the infrastructure can be completely customized as per the requirements (e.g. processing power, storage space, etc.).

How much customization is possible in SaaS and On-premise applications?

The development is handled by the SaaS provider, hence customizations for certain specific requirements is very difficult. Often times, even if the provider is ready to implement it, it is very expensive and they need to be sure that other customers are not impacted because of the change. The application provider is more open to accommodating some customizations and changes as per the requirements because they only have to modify the deployed instance and it will have no impact on other customers. For example, an MFA provider can include the particular SMS gateway required by the client.

How does maintenance and upgrades work in SaaS and On-Premise applications?

This falls under the responsibility of the provider to maintain and upgrade the application as and when necessary. This saves a major chunk of the cost for the customer. However, in case of issues, customers cannot do anything and the service can be disrupted until resolved by the provider.The customer is responsible to make sure the application is up and running all the time for their users. The upgrades can be time-consuming and slow as the customer has to wait for the update packages from the provider. Also, some costs are involved as some human resources will be required who will monitor and maintain a healthy system.

How much can SaaS and On-Premise applications be scaled?

SaaSOn Premise
The providers can scale their systems up or down depending upon their business scenario. The customer has no control over it. For example, for a data retention service, if the customer requires large capacity of storage compared to what the provider can offer, the providers will either shoot up the price as they need to scale up their systems or the service will be denied.The scalability is very simple and quick as the application is in the customer’s infrastructure. The system can be scaled up or down as and when required.

What amount of security is offered by SaaS and On-Premise applications?

The security of the customer’s data depends on what security mechanisms the provider has implemented. Also, as the service would be accessed via the internet, all the data, no matter how sensitive, will go through different servers. In an MFA application, the user secret will pass through different servers and this can be a small thing to worry about. The customer can control what and how the data can be secured. Also, as the application in in-house, it can be completely cut-off from the internet and only accessed from a secure network. This provides a major upper hand against SaaS for the applications that process sensitive data.

All the above differentiating categories can be summarized as follows:

All the above differentiating categories can be summarized as follows