Main image of article SaaS, On-Premises or Private Cloud: Which is Best for Compliance and Security?

You’ll admit it because you know it’s true: Now is the time to take a hard look at your security and compliance gaps — especially when regulatory requirements and data breaches are becoming increasingly serious concerns. According to Check Point’s most recent report, global cyber-attacks were up 7 percent in Q1 2023, with each firm facing an average of 1,248 attacks per week, and 1 in 31 organizations worldwide experienced a ransomware attack every week during Q1 2023.

But now what? With countless options available today, it’s hard to know where to start. Is a Software as a Service (SaaS) solution best? What about an on-premises option? Or is going with a private cloud infrastructure better?

What is Software as a Service (SaaS)?

Typically, SaaS software refers to the situation where the service provider hosts the application for the customer so that the customer only needs a web browser (or mobile device) to access the product. The customer is not involved in hosting the application, service or data and typically uses a URL to access the software maintained by the service provider. This provides the least control to the customer but outsources most of the responsibility for cybersecurity.

What is On-Premise Software?

At the other end of the spectrum, on-premise software refers to the case where the customer installs the software on hardware they own and maintains in-house. Typically, these companies will rent rack space in a commercial data center but own the servers, applications, and all levels of the infrastructure. The software may be directly installed on the servers (often called ‘bare metal’ hosting), or there may be a virtualization layer that lets one physical machine host multiple virtual machines. Regardless, the company’s IT staff manages the virtualization platform. This option gives maximum control to the customer, but makes them responsible for the application, infrastructure and hardware, increasing their burden.

What Other Cloud Options Exist?

In between these two extremes, some other options exist:

  • Public Platform as a Service (PaaS) or Infrastructure as a Service (IaaS). In this model, the customer may rent virtual computers from a public cloud provider (like AWS or Microsoft Azure) and host the application on the cloud platform. Unlike the SaaS option, the customer is responsible for installing and maintaining the application. Still, unlike on-premise, the customer doesn’t have to worry about hardware, infrastructure, or physical hosting. This gives the customer more control over the security posture, but still makes them dependent on the public cloud.
  • Private Cloud. In this model, the customer rents virtual computers over the internet from a third-party company that does not offer the same resources to other companies. Like public PaaS/IaaS, the customer is responsible for installing and maintaining the application, but they are not reliant on the public cloud, offering potentially greater security and reliability.

Here are five tips for finding the best option for your organization. 

SaaS Solutions Might Be Less Cost Effective for Large Companies

SaaS products have allowed many companies to roll out a new solution faster. They also empower companies to stay focused on what they do best rather than managing servers, systems, and IT assets in-house. But there is one major drawback: Large companies are discovering that many SaaS options come with a higher price tag than a traditional IT organization, due to pricing models that are less friendly when it comes to large enterprises. 

If Sensitive Data is a Concern, Consider a Self-Hosted, PaaS or Private Cloud Solution  

Suppose your organization requires a high level of security against cybercrime and other hacking-related events. In that case, you’ll need to balance the advantages of a self-hosted or private cloud alternative (limiting access to the data, choice of data residency and more control) with the benefits of SaaS (security taken care of by experts). Why? Because, where sensitive data is concerned, a private cloud or on-premises solution typically offers more robust protection against cybercrime.

First Research Whether Your Geography or Industry Dictates What Kind of Solution You Need 

You may not have as much of a choice as you think you do once you look into it further. Companies in specific geographies or industries may be required to use particular solutions based on GDPR, HIPPA, data residency rules, or classified intelligence data. Research whether your location or industry requires a specific solution or approach before wasting too much time on the nuances of the various options available. Industries that are heavily regulated, including banking, defense, aviation, and healthcare, often demand a higher level of data sovereignty and the most secure hosting capabilities available. 

Look into The Liability Protection and Security Features of SaaS Solutions

When considering SaaS companies and contracts, companies should consider key security features, including liability protection, data residency, certifications (SOC2, ISO 27001), company ownership, and geographical location (NATO vs. non-aligned). Case in point: Some SaaS services say they relieve customers of liability burdens but actually assign all liability to their customers. 

Examine the Customer Service Commitment and Capabilities of Every Option

Do you have an IT team that just needs an extra tool? Or do you have very few in-house capabilities and actually need a one-stop, turnkey solution to manage every step of the application lifecycle, with easily accessible audit trails, seamless integrations, and built-in instant messaging capabilities for easy, in-application communication? Suppose you need more than a stopgap for your already sizable in-house team to implement and a 360-degree solution is required. In that case, it’s best to consider options that deliver more robust customer service offerings. 

This is the time to address the multiplying security vulnerabilities. More than 340 million people have now felt the impacts of publicly-reported data breaches or leaks—in 2023 aloneaccording to a public data breach tracker created by the U.K. news site The Independent. And the number of cyber vulnerabilities are skyrocketing by 589% while the number of assets organizations are managing is increasing by 133 percent year-over-year, according to a new State of Cyber Assets Report (SCAR) report. Clearly, it’s never been more critical for organizations across every industry to solve this increasingly serious issue. 

Adam Sandman is Founder and CEO of Inflectra.