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Servers vs SaaS: Which is better?

The way businesses leverage technology to operate effectively and serve customers better is rapidly evolving. Many businesses are moving from maintaining servers on-premises to adopting cloud-based Software-as-a-Service (SaaS) solutions. While servers still have their place, SaaS are increasingly becoming the preferred choice for many organisations.

What are Servers?

Servers are computers or hardware designed for specific functions like managing networks, storing data, or running applications. Usually, companies owned and managed servers on-site to host essential business data and systems. This is called the on-premises server model.

Here are some fundamental aspects of on-premises servers:

  • Companies purchase server hardware and maintain it themselves
  • Servers are located in the company’s offices or data centers
  • IT teams are responsible for managing, securing, and updating servers
  • Allows for full control and customisation of server environment
  • Requires significant capital expenditure and IT resources 

While dedicated servers provide control, they come with costs like maintenance, upgrades, security risks, staffing requirements, and infrastructure expenses.

Understanding SaaS

SaaS or Software-as-a-Service shifts how businesses access computing resources and applications. With SaaS the software and data are hosted in the cloud by the service provider and users connect to the software via the internet through web browsers or apps. In addition, SaaS follows a subscription model based on usage or features. Common examples are, Microsoft 365, Google Workspace, Salesforce, Dropbox, and Slack.

Some benefits of using SaaS solutions mean there are no hardware or servers to manage for the end user. Automatic software updates and maintenance are provided by the SaaS provider. The service is accessible from any internet-connected device. In addition, the service is scalable based on the users needs and a subscription model provides flexibility.

The potential downsides to Saas are that you are reliant on the internet. However, with fast and reliable internet speeds now-a-days, it’s likely not an issue. There could also be some data security and privacy concerns with third-party cloud hosting, but most SaaS providers have high security.

Servers vs SaaS: Key Differences

On-Premises Server Pros

  • Customisation and control 
  • Keep data in-house
  • Integrate with in-house apps and systems
  • Meet specific compliance needs

On-Premises Server Cons

  • Expensive hardware and maintenance
  • Downtime risks if issues arise
  • IT staffing required 
  • Scaling requires capacity planning

SaaS Pros

  • Lower startup costs
  • Automatic updates and support
  • Access from anywhere
  • Scales flexibly with usage
  • Regular backups and disaster recovery 

SaaS Cons

  • Limited customisation options
  • Reliant on internet connectivity
  • Potential data security risks
  • Vendor lock-in potential

Making the Right Choice 

There is no one-size-fits-all answer regarding SaaS vs servers. However, companies need to evaluate their specific needs, capabilities, and readiness. Here are some factors to help determine the best approach:


Can your company afford the upfront and ongoing costs of servers? Is a flexible SaaS model more financially viable for you?


How much do you need to customise apps and environments?


Are there regulatory requirements around your data?

IT resources

Is your team resourced to manage servers effectively?


How sensitive is your data? Can a SaaS vendor provide adequate security?


How rapidly do you need to scale computing resources up or down?

For most companies today, SaaS provides the most cost-effective and agile approach to leveraging enterprise applications. But servers still have an important role to play depending on specific needs of the company. This could be in terms of security, compliance, customisation or mature IT capabilities. As with most technology decisions, there are trade-offs to consider between these two choices.

Servers and SaaS Can Co-Exist

The debate between servers vs SaaS does not have to be an either-or decision. In most cases, businesses are likely to benefit from finding the right balance between the two methods. Mission-critical legacy systems may need to remain on servers, while newer functionalities can move to SaaS models. A hybrid environment allows you to take advantage of the benefits of both options for you company.

With careful planning and evaluation of your organisation’s specific needs, servers and SaaS can complement each other. SaaS brings flexibility, scalability, and accessibility. While servers provide control over customisation and on-premise data security. The key is finding the right equilibrium to meet you’re your company needs, around budgets, capabilities, and strategic technology goals now and in the future.