The Difference Between SaaS and the Traditional On-premise software?

What are the key differences in SaaS vs the traditional on-premise TMS? Let’s take a deeper look into several differences between the two models.

Traditionally, TMS vendors licensed enterprise software to be administered on-premise. These vendors hand over most of the implementation, infrastructure development, and support to the IT department of the customer.

SaaS (Software-as-a-Service), on the other hand, is owned, delivered, managed, and accessed remotely from a server. SaaS applications run in the cloud (where they may be accessed in your web browser), and do not require capital expenditures on hardware, networking, or other support infrastructure.

Cost

On-premise solutions typically require high up-front costs for implementation. On top of an initial implementation fee, yearly maintenance costs and the cost of self-maintenance with your IT department can add up quite handsomely. Further costs can include the price of hardware assets and future upgrade costs. 

The SaaS model provides more flexibility depending on your needs.  You pay for what you need, with needs often differentiated through various tiers of capability offerings. SaaS payment models generally have a monthly or annual fee in order to license the product. FreightPOP, for example, offers 4 tiers that can be paid either monthly or annually. A subscription based service, which is all inclusive of maintenance and support, is the lower-cost option in comparison to the on-premise model.

Support & Maintenance

Traditional on-premise TMS’s leave the customer with most of the burden to maintain the product for the highest amount of availability and customization. On-premise software comes with the mentality that if it is not on fire, don’t call us – let your IT department handle the problem. This extends into instillation, IT infrastructure, and future upgrades as well.

Under the SaaS model, since the software is hosted by the vendor, it is the vendors responsibility to maintain, upgrade, and see that the customer has no issues with their application. SaaS vendors can also provide greater security measures with redundant instances in various secure data centers. Off-premise data centers provide the added benefit of better disaster recovery.

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Implementation & Scalability

On-premise applications take several months and tens of thousands of dollars to get fully rolling. It is a combined effort of the vendor and the enterprises’ IT department to get everything setup and running within the enterprise environment. In order to effectively scale the application with the growth of the company, long term planning of resources is required.

One of the SaaS model’s biggest advantages is the speed and ease of implementation. This can be a result of the overall simplicity involved with setup. TMS’s such as FreightPOP can be setup and integrated in as little as a few hours. This provides a net benefit later on as the need for scalability becomes greater. This may simply require the customer to move into a tier of functionality with the vendor.

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