What SaaS is and how it compares to on-premise
SaaS = Software as a Service
Short definition
SaaS is a model in which you use software over the internet on a subscription, without installing it on your own servers. The provider maintains the application, updates and infrastructure. The opposite is the on-premise model, where the system runs on your own servers.
SaaS (Software as a Service) is a software delivery model in which you pay a subscription for access over the internet, while the provider handles servers, updates and maintenance. You install nothing yourself - you log in and use it. It is today's dominant model for CRM, ERP and e-commerce tools.
The opposite is on-premise: the system runs on your servers, you keep full control and data in-house, but you bear the cost of infrastructure, updates and administration. SaaS lowers the entry barrier and start-up cost, but it is worth calculating the full TCO - over a long horizon a subscription can exceed the cost of running your own.
A common SaaS risk is vendor lock-in: difficulty leaving and recovering your data. Open source helps here - a platform like Open Mercato can run as a service while, thanks to open code and an API, leaving you the option to move it to your own servers. This combines the convenience of SaaS with the safety of avoiding dependence.
Key facts about SaaS
- You use it over the internet on a subscription, with no servers of your own.
- The opposite is on-premise - the system on your own infrastructure.
- Open source reduces vendor lock-in risk in the SaaS model.
Frequently asked questions
Which is cheaper - SaaS or on-premise?
It depends on the horizon. SaaS has a lower start-up cost, but the subscription adds up. It is worth calculating the full TCO over several years, not just the monthly price.
Does SaaS mean I lose control over my data?
In a closed SaaS that can be a risk. With an open platform like Open Mercato you have an open API and code, so you can recover your data or move the system to your own servers.
Related terms
Choosing between SaaS and on-premise and want to avoid lock-in? Let's talk.
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