Choosing 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.
- You buy the cloud-based software on a subscription basis, meaning there isn’t a large upfront outlay of cash to purchase a license.
- 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.
- 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.
- 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.
- 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.
- Software costs should be expected to increase in line with increases in business.
- Your ability to use and access the software is not limited by your internet bandwidth or ISP connectivity issues.
- The long term costs associated with a single version are lower (though initial investment is higher).
- 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.
- 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.
- Using software offsite, like VPN technology, is significantly slower and risks frequent interruptions.
- 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.