A Comparison of SaaS and On-Premise ERP Deployment

A-Comparison-of-SaaS-and-On-Premise-ERP-Deployment-photo-300x200 A Comparison of SaaS and On-Premise ERP DeploymentChoosing the right ERP deployment model can be a complicated decision for business owners, especially since both Software as a Service (SaaS) and On-Premise models have distinct benefits. The team at ATB has compiled a list of pros and cons for you to review as you consider SaaS vs. On-Premise deployment.

SaaS PROS

  1. You buy the cloud-based software on a subscription basis, meaning there isn’t a large upfront outlay of cash to purchase a license.
  2. Software has regular and ongoing updates which are included in the subscription price, so you aren’t forced to decide whether or not to purchase costly updates down the line – they are included and you’ll always be running the most current version.
  3. Pricing is based on consumption and number of available users can be changed “on demand” based on actual needs, so it’s significantly easier to “scale up” as business grows.

SaaS CONS

  1. Although the subscription (usually annual) fee is significantly lower than the one-time upfront cost of a license, the net long-term costs (especially if you aren’t inclined to upgrade every time a new version is released) are greater.
  2. Your data isn’t housed on-premise. Although most experts would agree that SaaS data centers are likely as secure (if not more secure) than your in-house servers, it does require a significant change in mindset.
  3. Software costs should be expected to increase in line with increases in business.

On-Premise PROS

  1. Your ability to use and access the software is not limited by your internet bandwidth or ISP connectivity issues.
  2. The long term costs associated with a single version are lower (though initial investment is higher).
  3. Business data is physically stored onsite, which can be reassuring for business owners and technology managers who aren’t experienced in or trusting of the cloud.

On-Premise CONS

  1. Maintaining updated versions of software is more expensive. Not only do you need to keep purchasing new licenses if you want the latest-and-greatest capabilities, but the reality is that as on-premise software increases in sophistication, it often requires expanded hardware infrastructure for optimal performance.
  2. Using software offsite, like VPN technology, is significantly slower and risks frequent interruptions.
  3. Many ERP software vendors have invested much more heavily in their cloud technologies, meaning that SaaS versions are often more sophisticated than their on-premise counterparts.

And the conversation about SaaS vs. On-Premise doesn’t end there. There are multiple hybrid models which can allow for customers to switch between cloud and on-premise deployment as needed. Which ERP deployment model is best for your business depends on a variety of factors. Contact ATB today to learn more or to schedule a free consultation with one of our software experts.

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