Which Is the Right Deployment Model: SaaS or On-Premises?


As software as a service (SaaS) and other cloud-based models continue to gain prominence, organizations are faced with the critical decision of whether to opt for SaaS or on-premises deployment for individual applications and workloads. Each option presents unique benefits. SaaS offers ease of deployment, scalability and predictable costs, while on-premises provides control, customization options and potential long-term cost savings.

It’s essential to carefully evaluate which approach aligns best with your business needs.

Top 8 Considerations to Determine Whether SaaS or On-premises Is Right for Your Applications

Here are the key factors to consider when determining whether SaaS or on-premises deployment is the right fit for the applications in your organization.

  1. Implementation and access with a wide geography of users; capacity to implement and data access requirements
  2. Budget for current costs, CAPEX versus OPEX and potential total cost of ownership (TCO) of each option subject to budget constraints
  3. Maintenance and support needed to support either option and the degree of customization needed
  4. Scalability for storage and underlying hardware network requirements
  5. Customization and upgrades with the degree of customization and potential for upgrades to support the applications
  6. Security and compliance needed to secure the application/s and ensure SaaS vendors can comply with local regulatory practices and data hosting requirements
  7. Backup and recovery that addresses who drives the requirements and the cost of such requirements
  8. Functionality and analytics, including expectations, budget and internal staff for feature sets

There are a number of other factors to consider, including context-specific risks, ESG considerations and tactical difficulties involved in migrating to SaaS. Also be sure to account for user behaviour and data flow change along with the need to understand and control license consumption and the need for software asset management tools. Also consider using an implementation partner to help migrate the applications to SaaS.

Deployment Decisions that Support Your Business Goals

Deployment model decisions should align with your business goals, budget, flexibility requirements and IT capabilities. Evaluating these considerations and the factors unique to your organization will help you make an informed decision that best suits your business needs.

Remember, the choice between SaaS and on-premises is not always a binary decision. Hybrid solutions that combine elements of both deployment models are also available, allowing you to strike a balance that meets your specific requirements. Ultimately, selecting the right sourcing approach is crucial for driving efficiency, innovation and success in your organization.

ISG helps enterprises weigh deployment decisions to best fit their organizational needs. Contact us to get the conversation started.