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In-House or SaaS -- How To Decide Which is Best for You

Is there still a place for legacy infrastructure solutions or is SaaS slowly making them extinct? Let's look at the pros and cons of each deployment model.

• By Chris Brenton
• 06/13/2012

One of the fastest growing sectors of cloud computing is public Software as a Service. Over the last few years, we have seen a diverse range of SaaS products hit the market, many of which are vertical solutions that have been historically deployed within the corporate environment. For example, file storage has classically been a solution deployed only on the local network. Today, there are a wide range of SaaS vendors offering file storage as an on-demand solution.

Are legacy infrastructure solutions destined for extinction, or are there still circumstances that may warrant an on-premise solution? In this article, we look at the pros and cons of each deployment model, in order to help you choose which model best fits your needs.

Infrastructure Deployments
Most IT professionals are familiar with deploying a solution as part of their internal infrastructure. With this model, you invest in a vendor's appliance or a dedicated server. The device is then deployed somewhere on the internal network, and services supplied by the device are consumed as required. As mentioned, historically this has been the default method an organization would use for deploying needed services.

Software-as-a-Service
With a SaaS solution, all required hardware is located "out on the Internet." This is also true for most of the required software. The solution is typically metered, which means the consumer only pays for what they use. Depending on the solution, usage could be billed based on per user, resources consumed or both. There is a diverse range of SaaS solutions available which includes everything from CPU time to application suites. There are also solutions designed to address a specific vertical need, such as customer management, HR functionality or even security.

Choosing On-Premise vs. SaaS
When assessing a potential solution, there are a number of factors that must be considered. The importance of each of these factors is going to vary depending on your requirements. For example, in some cases, the up-front cost may be more important to you than availability, while it may be the other way around in other instances. You need to decide the weight of each of the elements, and let that guide your decision towards the model that makes the most sense.

Cost of Deployment
When it comes to the cost of initially getting a solution on line, SaaS is the clear winner. An on-premise solution typically requires an initial investment in both hardware and software. With the SaaS pay-as-you-go model, you usually do not see a bill until after you have already started using the service. This factor may be important if the service is an integral part of generating revenue, as it may help to offset the cost of the service itself.

Funding
An on-premise solution is typically considered a capital expense, while SaaS is usually classified as an operating expense. While this difference may seem merely technical, capital expenses usually require more up-front work to receive approval. Operating expenses can be spent as needed, provided they are part of the budget, which typically means that fewer approvals are required to achieve initial launch.

Architecture Concerns
A SaaS-based solution is consumed just like any other Internet-based service. As a result, it requires very minimal up-front network architecture work. The possible exception is provisioning additional Internet bandwidth, depending on how much traffic will be generated by use of the service. An on-premise solution, however, must be architected into the infrastructure fabric. This could potentially require the modification or reconfiguration of other network components.

IT Involvement
An on-premise solution will most certainly require the involvement of IT. This may include architecture work, deployment of the server or appliance, as well as any other network modifications that may be required. There may also be a requirement to bring in outside contractors with a skillset specific to the service being deployed.

One of the appeals, and arguably one of the biggest drawbacks of a SaaS-based solution, is that it can usually be deployed with no involvement from IT. In fact, it is not uncommon for IT to be completely unaware that a SaaS solution is already in use. This can obviously cause privacy or security concerns, depending on what information is being stored within the SaaS service.

Scalability
Because SaaS services can be consumed as needed, scalability is typically a non-issue. If more storage space is required, the provider will automatically provision it. If more users need to be brought online, they are simply added to the service. In contrast, you typically need to plan for growth with an on-premise solution. Scaling larger usually necessitates swapping out the current appliance with a more powerful model. Further, an on-premise solution may have no option for scaling down in order to reduce costs. With a SaaS solution, you can usually scale back the amount of resources you are consuming, thus reducing monthly costs.

Support Costs
Most on-premise solutions require an annual service contract for support and updates. This will obviously increase the long-term costs. With a SaaS solution, support is usually included within the regular consumption costs. Since software is maintained by the provider, updates and patches are included as well.

Mobile Work Force Support
As the modern workforce becomes more mobile, it is relatively common for employees to work remotely with no need to physically visit a corporate office. This work model can be problematic with on-premise solutions. For example, say you are using an on-premise solution for patch and configuration management of end-user systems. In this model, the user's system will only be checked when they VPN into the corporate network. With a SaaS-based solution, the user's system can be verified as soon as they connect to the Internet, which results in a more consistent security regimen.

Security
Determining which solution is the best fit for security will require some deep reflection. On the one hand, no one will care as much about the security of your data as much as you do. This is because outsourced or not, you ultimately retain liability for its safekeeping. If you have sufficient resources, it may make sense to store the data on your own network. However if you are a smaller organization with no dedicated security staff, the provider may have superior resources to secure the data, thus creating a more secure posture.

Summary
Clearly, both on-premise and SaaS solutions each have pros and cons. Determining which solution best fits your requirements necessitates careful consideration of your priorities.