On-premise vs Cloud
or Hosting vs SaaS – Which
is right for you?

Clear C2

Are you confused with all the terminology for software implementation, like SaaS Cloud or On-premise? Or what’s the difference between some of these terms like Saas vs Cloud, or Saas vs On-Premise? If you are considering a CRM or any software implementation, it is important to understand the types of deployments and which one is right for you.  The acronyms and technical language can get very confusing. This article will explain the different terms, how they relate to each other and the pros and cons of each option.

Article at a Glance:

Defining the Terminology

Most enterprise software applications have two types of deployment options. You can have the software on your servers (at your location) or you can access your data hosted by the CRM vendor or a 3rd party data center (at their location). You will notice many of these confusing terms can be used interchangeably and fall within those two types of deployments. We will refer to the categories as “On-Premise” and “Cloud Services”.

Software on Your Local Servers – “On-Premise”

  • On-premise
  • On-prem
  • Premise
  • Premise software

Software Hosted at a Vendor or 3rd Party Site – “Cloud Services”

  • Software as a Service (SaaS)
  • SaaS cloud
  • Cloud
  • Cloud solutions
  • Hosting
  • Hosting in the cloud
  • Hosted software


On-Premise Overview

When you choose to install the software at your location the most common term is, “on-premise” or “on-prem” for short. Less than 20 years ago this was the only option (History of SaaS). For on-prem, you were given specs on what hardware was required, how much memory, etc. was needed to run the software. And on top of that, you needed IT people to support both the hardware and the software. Which got very expensive!

Then, a few years later, software vendors and 3rd party data centers started ‘hosting’ as an alternative. Even though the server hardware prices were becoming more affordable it was still costly, plus you still needed the personnel. Companies agreed that it seemed a more affordable option, however, they feared their data was not secure. It took several years for people to trust cloud offerings. But, as the SaaS module continues to grow most people are comfortable with either option as long as their data center has all the security requirements.

Benefits of On-Premise
  • You are in control of your data’s security. If you aren’t comfortable relying on the security of where your information is stored, this may be the best option for you.
  • Your IT team is in charge of your data. If you are more comfortable with your employees managing your data this may be a good option. Or if your CRM vendor or their partners need to make changes to your system, you might get a quicker response time with your team handling the requests.
  • Less expensive option long-term. With on-prem, you purchase the licenses and pay annual maintenance fees. If the software is something you are going to use long-term, it may be more cost effective to buy it vs. renting it.


Cloud Services

Cloud Services is a subset of Hosted Services, which includes Software as a Service (SaaS), Infrastructure as a Service (IaaS) and Platform as a Service (PaaS).  SaaS is a software delivery model where a third party provider hosts application software and databases. This information is available to customers via a web browser.  The software is licensed on a subscription basis and centrally hosted. It is commonly referred to as “On-Demand Software”.

Simply put, cloud computing is the delivery of computing services over the Internet (“the cloud”). These services include servers, storage, databases, networking, software, and analytics. One of the most common uses (services) of cloud computing is providing access to software such as CRM as SAAS.

Benefits of Cloud Services
  • No large upfront cost. Cloud computing eliminates the capital expense of buying hardware and software. and setting up and running on-site data centers.
  • Speed – Most cloud computing services are on demand.
  • Flexibility & Scalability – Being able to deliver more or less computing power, storage, and bandwidth—right when it’s needed.
  • Less internal IT resources need – If your software is user-friendly and/or the SaaS vendor’s monthly fees include services you won’t need any additional resources
  • Reliability – Cloud computing makes data backup, disaster recovery, and business continuity easier and less expensive because data can be mirrored at multiple redundant sites on the cloud provider’s network.



There are benefits to both on-prem and cloud-based software. If you are in a high-security risk industry and aren’t comfortable outsourcing to a 3rd party, you may want to consider having your software locally on your own servers. However, cloud-hosted options are very reliable, scalable and affordable out of the box. You should consider what your company needs and what your software vendor offers. If you still have questions we’d love to help. Give us a call at 972.304.7110.

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