On Premise versus Software as a Service (SaaS)

“On-Prem” and “SaaS” are different philosophies on how to set up your IT architecture and both have their distinct advantages and disadvantages.
Before we dive deep into the comparison, we need to take a step back and discuss IT architecture in general.

We discern 3 “admin layers”:

1. Infrastructure (Physical Layer)
2. Platform (Operation Layer)
3. Software (Application Layer)

The Physical Layer (also called the “Hardware Layer”) is the basis on which all software runs. The Operation Layer covers the Operating System or OS that runs on top of the Physical Layer: it manages all traffic on the computer or server. The third and final layer is the Application Layer. In this layer, we have specific applications like your PIM System.

Operational layer requires a different set of skills and experience to operate effectively. An Application Manager knows little about managing the Operating System (generally speaking) and most OS specialists know little about managing the physical hardware.

Software in general (including PIM Systems) is often offered in a range of options. Some Software Vendors offer their software in multiple setups (e.g.: both a “SaaS” option and an “On-Premise” option), but there is a clear shift towards (pure) Software as a Service. Many Vendors are shifting from On-Premise to offering a SaaS option next to (or instead of) their On-Premise option.
Each layer has its own specialisms. An application manager usually knows little about the OS and a specialist in the field of OS is usually not the one who can manage the physical device.
Software and therefore PIM software is offered in different variants. Sometimes a software supplier can deliver its software in more than one variant, but more and more you see that the software solutions in particular only offer the SaaS variant. We are clearly seeing a shift from On-Premise to SaaS.

Five ways to manage your Layers

You can manage your Physical, Operations, and Software Layers in multiple ways. We see 5 different setups that are clearly discernable, especially when it comes to who is responsible for what:

1. On Premise
2. IaaS (Infrastructure as a service)
3. PaaS (Platform as a service)
4. SaaS (Software as a service) Single Tenant
5. SaaS (Software as a service) Multi Tenant

What are the main differences?

On-Premise

Managing the technical infrastructure, platform and all technical software is left to you (the customer). Managing the Applications (including PIM Tools) are also the responsibility of the customer, often with support from the Vendor.

IaaS (Infrastructure as a Service)

Managing the Infrastructure is outsourced to a third party (a data center, for example). Platform and Applications are still managed by the customer.

PaaS (Platform as a Service)

Infrastructure and platform are both managed by a third party. The Application layer is still the responsibility of the customer.

SaaS Single Tenant

The complete stack (from Physical to Application Layer) is managed by a third party. However: the stack is managed specifically for one customer and upgrades and changes are deployed in collaboration with the customer. All upgrades and changes are the same for all customers, but you might be running on different versions.

SaaS Multi-Tenant

The complete stack (from Physical to Application Layer) is managed by a third party. All upgrades and changes are managed by a third party and are the same for all customers. Multiple customers might use the same instance of the software, but in many cases, the data (e.g.: content, images, video) are managed in separate databases.