The Customer Experience Debate: SaaS vs. On-Premise

Behind every great company, lies the great customer experience debate: Software as a Service (Saas) or an on-premise solution? 
A little background: historically speaking, one of the biggest barriers to the adoption of a full Customer Experience Management (CEM) solution has been the lack of options. Previously, the only choice has been to install the software on-premise behind the firewall, and utilize a network TAP or SPAN port. Therefore, in order to provide 100% journey-capture and site-specific events and reporting (and to capture enough technical data to find and fix conversion barriers), a passive capture approach was required. With the current generation CEM tools, this is no longer the case, as most of these solutions are now being offered as SaaS, in addition to the more traditional on-premise solutions.
While every business is different, which solution provides the most advantages across the board? 
Renting vs. Buying
SaaS is an alternative to the traditional model where a user has to build the server, install the application, and configure it. In SaaS, the user does not pay for the software itself. Instead, the SaaS model works more like a rental, where the customer has authorization to use the software for a period of time. 
In order to deploy these CEM SaaS solutions, a small JavaScript tag is inserted on the pages to be captured (normally using a tag manager) in exactly the same as with traditional web analytics. This way, sensitive pages can either not be tagged, or simply marked-up to scrub sensitive data before being sent to cloud storage. Once the tag is deployed, every user journey is then securely captured and stored in the cloud. The uploaded files are small text files and do not create a perceptible performance impact, providing similar performance to the traditional on-premise solutions.
For new companies, and those that have already made the move into cloud-based solutions, consider a “cloud first” model where all infrastructure and applications are targeted for the cloud. This model greatly simplifies the IT model for the company and allows them to leverage a pay-for-consumption model. 
Considerations Before a Switch 
Enterprises with legacy applications and investments in existing datacenters may want to consider a number of things before switching to a SaaS solution:
1. Financial Viability
Depending on the efficiency of your internal IT organization, moving to the cloud may or may not be the right answer. It is important to understand the difference between CapEx and OpEx models and to take into consideration the Total Cost of Ownership (TCO). However, TCO should not reflect the internal costs of infrastructure, licensing, and support to make a valid comparison of the two solutions.
2. Complexity of Integration
SaaS solutions are typically much easier to integrate and implement than on-premise solutions. You should understand how complex the integration is and what costs will be associated with integrating the solution into your existing infrastructure.
3. Sensitivity of Data
The types of data that will be hosted in the cloud may impact your decision, as well. Some businesses like financial and health care providers have regulatory and privacy requirements that may not be suitable for cloud-based solutions. Highly sensitive or classified data may be better suited for on-premise platforms.
4. Security
Every company has different risk profiles. While security is becoming less of a concern with most of the cloud providers, it is important to create a security risk profile of your applications and know the risk tolerance of your company.
The Advantages of SaaS
Now that we’ve uncovered the difference between an on-premise CEM and a cloud-based SaaS, let’s look into the advantages of SaaS overall:
1. Faster Deployment
The typical SaaS based solution can be provisioned and deployed in less than a day. This allows you to start delivering value out of the solution almost immediately, avoiding time spent provisioning, installing, and configuring an on-premise solution.
2. Lower Costs
SaaS solutions cost less than their on-premise counterparts due to shared or multitenant environments where hardware and software licenses are low compared to the traditional model. Since the SaaS provider owns the environment, there are no maintenance costs. 
3. Scalability and Integration
SaaS environments can scale quickly to provide additional capacity without needing you to provision new hardware and licensing. Most SaaS solutions provide integrations to other SaaS offerings provided by the vendor.
4. Upgrades and Updates
Upgrades and updates are automatically applied to the SaaS offering, usually immediately after they become available. This eliminates the need to schedule resources and downtime to update the solution.
What Works Best For You?
While every organization is unique, there are many factors to consider when choosing to deploy as a SaaS or an on-premise solution. While SaaS solutions provide quick deployment and typically lower costs, they don’t always include all the flexibility, functionality, and features as an on-premise solution. Do your research, look into multiple options, and understand the impact of each method. Doing so will allow you to uncover the best solution for you.  
Do you prefer an on-premise CEM or a SaaS solution? For more information, contact us at 
By John Butler
About the Author:

John Butler is a Customer Experience Team Lead at Stratigent.

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