How to choose between SaaS or On-Premise?

Posted by Louis D'hondt on 02/02/2018

For companies considering the purchase of software, the choice between SaaS (software as a service) and On-Premise is often based on generalities. With On-Premise you initially have higher costs; with SaaS you do not own the software. However, the analysis is more nuanced than this.

Cloud SaaS vs On Premise

The major advantages of SaaS are well known. You can use the software directly in your browser, the package is ready to use and, if necessary, its use can be terminated immediately.

The opposite applies to On-Premise. As a customer, you invest in hardware (servers) on which the solution runs. You cannot start without a major investment and you also cannot test the solution before deciding whether it meets your needs.

Investment and payment

In other words, investment cost immediately becomes the most pressing factor in the comparisons between SaaS and On-Premise. With SaaS, the investment is limited to the cost of the license; On-Premise is always a long-term investment. The license fee of SaaS also covers hosting and support for the ‘subscriber’ in addition to the license. Often the customer’s commitment is small: it pays for a short period. This keeps the threshold low and makes a quick evaluation possible.

Fast updates

Yet investment is not the only aspect on which you can base the choice between SaaS and On-Premise. The difference with respect to manageability is also striking. With SaaS, you can enjoy weekly updates if necessary; with On-Premise, changes are slower. The supplier must, as it were, bring the software to the customer and implement it in consultation with the IT department. This, however, does not necessarily mean that all companies automatically opt for SaaS. The software market is evolving in the direction of SaaS, but the switch is occurring more slowly with respect to route optimization solutions. It is mainly the new providers that are trying to remove barriers and offer added value with SaaS.


An additional advantage – also in the long term – is the scalability associated with SaaS. The software license offers the possibility to easily extend the scope. Or to reduce it, depending on the scale that best fits the goals of the company. Via the software’s central management, the providers collect interesting data about how customers are using the solution and how the software can evolve in function of its users. This added value disappears with the On-Premise formula, where the solution remains isolated on a server.


When it comes to route optimization software, we note greater demand for SaaS, but each organization must find the solution that is right for it. Some key questions that you can best ask yourself when making your choice:

  • Is the aim to allow the software to grow with the company?
  • Do you have a clear view of the needs?
  • How experienced is your IT team?
  • Do you want to integrate the software with existing systems?

Going through a list of key questions will make the choice between On-Premise and SaaS more easy. So surprise, but SaaS solutions are on the rise.

Louis D'hondt

Written by Louis D'hondt