SaaS vs On-Premise: The new norm and its exceptions
The business software landscape has changed dramatically in recent years. Where a decade ago, businesses hesitated between cloud hosting and internal servers, today Software as a Service (SaaS) is establishing itself as the dominant model in most sectors.
This transformation is not the result of chance: it meets the new requirements of modern work and current economic constraints. However, this majority trend does not mean that On-Premise has completely disappeared. Understanding in which contexts each model remains relevant becomes essential to make the right technological choices.
The reality of the market: SaaS has (almost) won
The SaaS market is experiencing exceptional growth: valued at $317.55 billion in 2024, it is expected to reach 1,228.87 billion by 2032¹, representing an annual growth of 18.4%. This expansion reflects a profound change in business habits.
The adoption data is revealing: 85% of all business applications are expected to be based on SaaS by 2025², while businesses are using an average of 106 SaaS applications each in 2024³. Even more significantly, 52% of businesses have already migrated the majority of their IT environment to the cloud4.
Economic benefits explain this migration: businesses can reduce their total cost of ownership (TCO) by up to 40% by migrating to the public cloud5, and those with at least 60% of their workloads in the cloud realize significant financial gains,6
This evolution is fundamentally transforming the question of technological choice: it is no longer so much a question of knowing whether to migrate to SaaS, but rather of identifying the rare cases where On-Premise maintains its relevance.
SaaS: Why it has become the norm
The evidence of everyday life
Look around you: Office 365, Salesforce, Slack, Zoom... You are already using SaaS without thinking about it. These tools have revolutionized the way we work, and for good reason.
The benefits that changed everything
🌍 Hybrid work by default
Are your teams in Paris on Monday, teleworking on Tuesday, on customer trips on Wednesday? SaaS naturally follows this new way of working.
⚡ No more nightmare updates
No more server migration crashing on a Friday night. The improvements come automatically, discreetly, without your IT team losing their weekends.
💰 Predictable budget
No more big investments followed by hidden fees. You pay for what you use, when you use it.
🛡️ Enterprise-grade security
Microsoft, Google, AWS are investing billions in cybersecurity. Your SME of 50 people will hardly have the same resources.
📈 Instant scalability
Are you doubling your workforce? A few clicks are all it takes. Are you cutting back? Same. No oversized server that collects dust.
Why are businesses switching massively
The pandemic accelerated the movement, but the trend was already there. Businesses realized that:
- Their IT teams can focus on strategy instead of maintenance
- Costs become variable and predictable
- Innovation happens faster when you don't manage infrastructure
On-Premise: The last bastions
So is on-premise dead? Not quite. There are still a few situations where having your own servers makes sense.
When On-Premise still resists
🔐 Ultra-regulated sectors
Defense, some health data, pharmaceutical research... When the law requires that your data never leave France, On-Premise remains essential.
🏭 Very specific industries
Do you manufacture semiconductors using processes that are unique in the world? Your custom production software may not find a SaaS equivalent.
💻 Critical latency
High-frequency trading, real-time industrial control... When every millisecond counts, being “next to” your data is still an advantage.
💸 Very high volumes over the long term
If you have 10,000 users for the next 20 years, the SaaS addition can actually hurt.
The real hidden costs of on-premise
Beware of optical illusions! On-Premise seems cheaper on paper, but:
- Your IT team spends 60% of their time on maintenance
- The breakdowns of 2:00 in the morning are for you
- Security updates are your responsibility
- The backup that silently fails for 6 months... also
How to decide in 2025?
The reality test
Ask yourself these questions:
- Is your data really that sensitive?
- If it's “just” accounting or EDM → SaaS
- If it's national defense secrets → On-Premise
- Do you have a real IT team?
- 1-2 people who “do IT” → SaaS
- A dedicated team with experts → On-Premise possible
- Is your business evolving quickly?
- Growth, new subsidiaries, mobile teams → SaaS
- Stable organization for 10 years → On-Premise possible
- What is your horizon?
- Vision 2-5 years → SaaS
- Investment 10-15 years → On-Premise can be justified
Our advice for 2025
For 90% of businesses: Leave SaaS
It's easier, faster, and you can always migrate later if your needs change.
For the remaining 10%:
Your constraints are so specific that you need support to choose.
The future? Even more cloud
The trends for the coming years are clear:
- AI integrated everywhere (easier in SaaS)
- Ongoing hybrid work (impossible without cloud)
- Integrations between tools (the SaaS ecosystem excels at this)
- Environmental regulations (sharing servers is more environmentally friendly)
In summary
SaaS has become the norm because it meets the needs of modern work: flexibility, simplicity, scalability. On-Premise survives in very specific niches where total control remains essential.
The real question is no longer “SaaS or On-Premise?” but “how can I successfully migrate to SaaS?” And for cases where On-Premise remains relevant, the analysis becomes more complex: regulatory constraints, existing architecture, long-term costs... This is where expert support comes into its own.
You want discuss your specific situation ? Our experts help you see things clearly and choose the solution that really fits your needs. Because in the end, the best technology is the one that saves you time and peace of mind.
sourcing
- Vena Solutions - “85 SaaS Statistics, Trends and Benchmarks for 2025" - Global SaaS market projection from $317.55 billion in 2024 to $1,228.87 billion by 2032
- Meetanshi - “SaaS Statistics for 2025" - 85% of business applications will be Saas-based by 2025
- Hostinger - “SaaS statistics for 2025" - Companies use an average of 106 SaaS applications each in 2024
- Auvik - “15 Cloud Migration Statistics and Trends for 2024" - 52% of companies have migrated majority of IT environments to cloud
- CloudZero - “90+ Cloud Computing Statistics: A 2025 Market Snapshot” - Up to 40% TCO reduction by migrating to public cloud
- CloudZero - “90+ Cloud Computing Statistics: A 2025 Market Snapshot” - Organizations need at least 60% of workload in cloud for noteworthy financial gains
