cloud vs. on-premise
Cloud-Based SaaS Software
SaaS (Software as a Service) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted by a third-party provider. It is sometimes referred to as “cloud-based” or “web-based software.” A SaaS application is typically accessed by users using a web browser. The application’s source code is the same for all customers and when new features or functionalities are rolled out, they are available to all customers. Organizations can integrate SaaS applications with other software using application programming interfaces (APIs).
The SaaS delivery model eliminates the need for organizations to install and run applications on their own computers or in their own data centers. This eliminates the expense of hardware acquisition, provisioning and maintenance, as well as software licensing, installation and support. Other benefits include flexible payments on a monthly or annual basis. This approach moves the software purchase from a capital expense to a recurring operating expense that allows organizations to exercise better and more predictable budgeting.
On-premises software is a type of software delivery model that is installed and operated from an organization’s in-house server and computing infrastructure. It uses an organization’s native computing resources and requires only a licensed or purchased copy of software from an independent software vendor.
It is one of the most common, traditional methods of using enterprise software applications. On-premises software typically requires a software license for each server and/or end user. The customer is responsible for the security, availability and overall management of on-premises software. The software vendor also provides after sales integration and support services.
On-premises software is more expensive than cloud-based software because it requires in-house server hardware, capital investment in software licenses, in-house IT support staff and longer integration periods.