Cloud vs. on-premise: What's right for your business?

In today's world, almost everything has moved online. For businesses, this includes shifting from on-premise to cloud-based software systems.

For those organizations still stuck in their traditional ways, that have yet to make the transition, it may seem like a stressful or overwhelming move. But in order to future-proof a business, we are fast approaching the point where it is no longer a choice.

If moving to the cloud has been part of your business’ plans for some time but you’ve been putting it off, if you’re feeling lost and unsure of where to begin, or if you don’t even know what any of these terms mean, then this article is for you. This will introduce you to the key terms, outline where to begin, guide you through the process, and show you that any change is not as difficult as you might think. 

What does on-premise mean?

Traditionally, most organizations relied on installing on-premise software. This type of software is deployed in-house and is operated from a server and computing infrastructure stored, as the name suggests, on the physical premises of that organization

A software license for each server or end user is required, and the organization is responsible for the overall management and security of the software. Until recently, on-premise software was thought of as a more secure option, largely because the software remains on an organization's server.

However, there are some drawbacks to installing on-premise software, including:

  • Cost: You must pay upfront for the software and there may be additional annual maintenance fees.

  • Infrastructure: You must purchase your own hardware to run the software, and you are also responsible for upgrading and replacing your hardware over time.

  • Security: Although having your software and date on-site can give a feeling of comfort, it comes with added responsibility. Regular backups and updates need to be carried out, and maintenance is required often for your software to run smoothly.

  • Access: Employees cannot access the software unless they are on-site. As a result, your employees lose the ability to collaborate on projects outside of the office.

The capital investment, ongoing maintenance, and responsibility of server hardware are enough to make an organization think twice about installing on-premise software.

For this reason, an increasing number of organizations have transitioned, turning to the Software-as-a-Service (SaaS) model to address their specific needs. 

What does SaaS mean?

Rather than buying and installing software on-site, organizations can opt to have their software hosted by a third-party provider.

SaaS, a type of cloud computing, allows users to access their data and software over the internet. And, instead of paying up front, SaaS is a license or subscription-based software. Ultimately, this means you only pay for what you use.

Because of their independent infrastructure, many organizations have built their businesses on cloud-based platforms. Computer software company Flexera recently surveyed nearly 800 technical professionals about their adoption of cloud-based software.

The survey found:

  • 94% of respondents use cloud software

  • 84% percent of respondents have a multi-cloud strategy

  • 69% of respondents use at least one public and one private cloud

The survey also found that many organizations moved to the cloud for the ability to fully integrate data and processes. This key benefit has led to the investment in collaboration and content management tools as well as client management applications. And, because of cloud-based technology, organizations can streamline and standardize their workflows – providing unique tools and support to their employees and clients.

5 key benefits of SaaS

The overall SaaS market is predicted to reach over $160 billion by 2022, according to Transparency Market Research. This growth will only continue upward as organizations become more familiar and comfortable with cloud-based software solutions.

While some may feel reticent to make the transition to cloud computing due to uncertainty, confusion or simply feeling overwhelmed, here are five key benefits to adopting cloud-based software technology. 

  1. Cost-savings: You pay for what you use—any additional costs, such as the maintenance, security, and storage of your software rest with the SaaS provider.

  2. Easy set up: You won't have to invest in hardware and infrastructure set up. SaaS providers host the cloud-based software which is accessed via a web browser or dedicated app. Users register with the cloud provider, adjust configurations and are ready to go.

  3. Automatic updates: With SaaS, it's easy to ensure you have the latest software running at all times. The software is upgraded centrally versus on each individual machine.

  4. More storage capacity: You will never have to worry about running out of storage. With a subscription-based service, you have the option to change the amount of necessary storage whenever the need arises.

  5. Universal access: You can access the software using a variety of devices, such as a computer, tablet or smartphone. This increases mobility as well as productivity, allowing users to collaborate on projects outside of the office.

Make a move

Current trends show any reluctance to embrace SaaS is fading.

Although there are many pros and cons to weigh when selecting a new software system, there are a variety of reasons SaaS is the right choice for businesses of all sizes. From cheaper up-front costs and predictable ongoing costs to smooth implementation and greater stability, cloud-based systems have made software more affordable and accessible.


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