SaaS vs On Premise ERP – Making the right choice for your business

As companies become more creative in the way they slash operating costs, more traditional businesses are dipping their toe in service based offerings, clearing the way for SaaS to quickly become the new norm.

SaaS vs On Premise – Making the choice


Characteristic On-Premise SaaS
Rights and Use A software license provides a limited, but perpetual right to use the softwareA subscription provides a right to access the software via the internet, but there are no transfer of rights
ERP Capacity ERP capacity is tied to the number of users (named or concurrent)ERP capacity is tied to the amount of cloud resources to which a company is subscribed
Pricing Model Software is acquired via a one-time, upfront payment for licensesMaintenance and support are paid via recurring annual fees typically calculated as a percentage of license pricesAccess to the software is provided in consideration for the payment of recurring subscription feesThere are no separate maintenance and support fees (these amounts are baked into the subscription fees)

The benefits of SaaS will outweigh the cost

When considering SaaS for your business, it is important to factor in more than simply price. Obviously an important issue, you will soon notice that factors such as security, customisation, control and compliance will quickly equal in importance. The advantage of a SaaS model for business means that all updates, back ups, licences, maintenance and subscriptions are managed dynamically by the Vendor, freeing up time for the end user against future security or data risks.

Customisation is the key

The Australian’s Technology Special Report ‘SaaS is fast becoming the new normal’ interviewed NetSuite CEO Zach Nelson, who says the ability to customise SaaS offerings is what sets the new generation of providers apart from the older software incumbents. “Our customers are incredibly entrepreneurial and that is what drives innovation,” he says. “They want to be able to adapt the software to suit their particular needs and that is what we offer in a SaaS form.” The core architecture of NetSuite’s OneWorld model uses a single data store, which is presented in different ways to different users, for multi currency, multi lingual and multi tenanted scalability. A significant advantage over firms offering on-premise systems, Nelson says, “not all apps were built with customisation from the ground up. If you are just adding this to your product offering now, you have built your offering incorrectly.” Reference: The Australian

Choose SaaS if:

  • You need a business software solution that grows, as you need it.
  • You’re looking to establish new capabilities, or replace existing applications.

Read more on the benefits of SaaS here and find out how NetSuite’s SaaS system has sparked a ‘Service as Software’ revolution