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SaaS vs On-Premise Software

  • SaaS software reduces investment in hardware, is simpler and facilitates scalability. No hidden costs.
  • On-premise allows for more customization but is more complex to manage and requires higher maintenance.

For most users and companies SaaS is the most suitable solution. On-premise is only recommended if the user requires high customization and has high technical knowledge.

Total Cost of Ownership (TCO) for on-premise software is normally higher (see image below).



Software is located at the vendor´s servers and accessed through the internet.

Software is installed in the user´s own servers or hardware.

Lower IT workload for the user. The software vendor manages maintenance, updates and security.

Higher IT workload for the user. The user is responsible for the maintenance and updates.

Easy installation. Upgrades are automatic.

Time-consuming installation. Upgrades done manually.

High accessibility. You can access the software with an internet connection.

Low accessibility. Only accessible from the physical location where the software was installed.

Simple to scale up/down as it is easy to add/reduce number of subscriptions.

Scaling is more complicated. Slower to implement.

Less customization.

More customization, though at the expense of more complexity.

Saas vs On-Premise: Technical Differences

Saas vs On-Premise: Economic Differences

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