On-prem vs SaaS - which Model Wins?

Organizations often face a choice between an on-premises model and a SaaS model when purchasing technology. It’s a recurring dilemma for many in the purchasing department, often boiling down to a decision between higher CapEx or increased OpEx.

But how do the numbers stack up in a cost comparison? Below is an example 5-year cost comparison for a 1,000-employee organization choosing email, office productivity and ERP/CRM software stack - entirely fictitious, mind you.

These numbers might be different from project to project. But it's important to note that this comparison includes only explicit costs—not opportunity costs related to more/less agility, security, flexibility, or scalability associated with each consumption model.

If we factored in those non-explicit costs, the calculation might turn out quite different.

Comparing on-prem and SaaS