In-House Software vs SaaS: What's the Difference and Which Is Better?

The global SaaS market was valued at USD 273.55 billion in 2023 and is projected to grow to USD 1,228.87 billion by 2032.

Many companies are making the switch to software-as-a-service solutions rather than in-house software.  While that is often the best choice, it’s not always the right direction. SaaS and on-premise each have their benefits so you shouldn’t make the change only because it’s the popular option.

Let’s look at the difference between SaaS and on-premise and how to make the right choice for your company.

SaaS and On-Premise Software Installations Compared

SaaS vs On-premise SaaS, or software-as-a-solution, is cloud-based software. It runs on the SaaS provider’s servers and the software is accessed via an internet browser. The provider takes care of all aspects of installing, maintaining, and upgrading the software as well as storage of your company’s data.

On-premise software gets installed on your company’s servers. It may still be accessible over the internet but that will depend on the configuration of your server. Your in-house IT team is responsible for maintaining the server and all the factors that go along with that.

Some tools are only available in one or the other configuration, while others, like DBGallery, give you the choice of how you wish to set it up, offering both directions.

Benefits of Software-as-a-Service

SaaS solutions offer several benefits over on-premise software, including:

  • Reduced implementation time
  • No installation or maintenance required
  • No internal IT team required
  • No need to buy or maintain the infrastructure required to run the software
  • Management by provider: The vendor handles software installation, maintenance, upgrades, and data storage, freeing up your IT resources.
  • Support and uptime: SaaS providers have a great deal of experience with just their application and operating environment. On-premise installations usually have personnel which work a multitude of applications without being specialists.  This equates to SaaS systems typically being significantly more available, with less downtime, with better support, than in-house systems.
  • Scalability: Cloud-based solutions are almost always significantly easier and faster to scale.  When on-prem, hardware has to be approved, delivered and installed, all taking weeks or months.  Cloud-based solutions can often be scaled in hours.

Installation and Maintenance

Because you don’t need to install anything locally or maintain any kind of infrastructure to keep the software running, SaaS needs very few resources from your end, if any at all.

You don’t need to hire IT staff, pay the operational costs for servers, or worry about installing updates and patches. The provider handles all that so you’ll always be using the most up-to-date version.

This also reduces the implementation time so you'll be up and running sooner.

End-to-End Support

If you run in-house software, the software provider most likely provides technical support if problems arise. But they won’t be able to provide support for any of the on-premise resources. If some kind of problem pops up that’s related to the interaction of the two, it can be challenging to solve.

With SaaS, the provider handles everything—the software, hardware, server resources, network connection, etc. If there’s a problem, you aren’t responsible for sorting out any of it.


Scalability is another big advantage of SaaS tools. Cloud-based tools have nearly unlimited scalability.

If you suddenly need more resources, the SaaS provider can easily allocate them to your account. This usually happens seamlessly so you won’t even know when it’s necessary.

With on-premise installations, you’ll need to upgrade your servers, network bandwidth, or other things to add capacity. This requires additional costs in the way of personnel time, hardware, and the time spent on making the upgrades.

Benefits of In-House Software Installation

On-premise software also has several advantages, including:

  • Regulatory compliance
  • Faster local network connection if internet connection is slow
  • Lower storage costs in some cases
  • Can be a better choice for storing highly sensitive data

Regulatory Compliance

If your business is in a market that has regulatory restrictions over how data gets stored, such as HIPAA in the healthcare industry, on-premise software may be a better choice.  Although the SaaS provider may have the appropriate certifiations. 

You can implement any security requirements you need to be fully compliant and you won’t have to worry about data being stored on a remote server.  Some companies, and government agencies, are simply not yet ready to trust their data to the cloud.

Local Network Bandwidth

If you’re in a region with slow or unreliable internet connections, in-house software may have better performance. You’ll have the full bandwidth of your local network so the software can run at full speed with no interruptions due to lost connections.

Potential Lower Storage Costs

Cloud storage costs can be quite high when you store large amounts of data (multiple terabytes). Local storage is more economical at that scale so you could reduce your storage costs by running an on-premise solution.

Sensitive Data

If you work with information, such as sensitive images or other highly personal data, you may be more comfortable keeping it entirely in-house. Working with a SaaS tool means that information gets stored on another company’s servers.

How to Choose the Best Option for Your Business

There are a few key factors to consider when deciding which of the two options is right for your business.

Maintenance and Support

Do you have your own in-house IT team or a managed IT support service that you already work with? If not, SaaS will help you avoid having to build a team of your own.

This can reduce your operating costs as well as let you get up and running quickly. If you need to hire or outsource your own support, you’ll need more lead-time.


Do you expect your needs to change in the future? If so, a SaaS solution may be best since it can scale on demand.

This is also important if your needs fluctuate. For example, if your business is seasonal and your needs are higher for a few months of the year, you would need to build enough infrastructure to meet those needs but some of it would go unused during the slower times.

Why spend the extra money on mostly unnecessary infrastructure when a SaaS solution can scale up and down as needed?

Backup and Storage

Are you working with terabytes’ worth of data in your business? If so, an on-premise installation may be the best choice.

Your storage and backup costs will likely be less than they would be with a SaaS solution and you may also save money on your internet bandwidth costs.

Regulatory Compliance

Do you need to meet certain regulatory compliance requirements in your business, such as HIPAA in the healthcare industry or FINRA in the financial industry? If so, an in-house solution will give you more control over your data.

You can implement any security procedures necessary to comply with the regulations and you won’t need to worry about whether any of your data is stored on a server outside of your home country. With cloud-based storage, this can be more difficult to manage.

Company Direction

Company direction is an important factor. Check with your IT managers to see if your organization has a preference for cloud or on-premise solutions. You may find the decision has already been made for you.

Where to Turn for Help Making a Decision

If you’re looking for a digital asset management tool and aren’t sure whether you would be better served with a SaaS or on-premise solution, DBGallery can help. Our DAM tool is available in whichever configuration best fits your scenario.  Concerned about making the right decision?  With DBGallery, switching from SaaS to on-premise, and visa versa, is easy because it involves just a database backup and restore along with moving the relevant file folders.

"DBGallery is a great solution to our problem of storing all our images in one place, finding them quickly when needed, and sharing them." - Kathy Santos, Town of Lexington, MA

Get in touch with us today to discuss your requirements, and we’ll get you set up with the right option for your business.