Customisation
Customisation is the first benefit of on-premise deployments. With a SaaS deployment, the product feature of the SaaS solution would have to fit all tenants’ needs, not just yours. There are some exceptions in SaaS, but you would have to set up a generic-enough API to accommodate some customisation. As such, for some large PSPs that build their authentication by integrating several solutions, it makes sense to build on-premise.

Security
For some reasons, a company might go for an on-premise option because there is a need to control the physical access to assets. However, keep in mind that SaaS providers, especially in the SCA area, put security first and can offer premium security even for SaaS.

Compliance
Having the setup on-premise allows you to be sure about data location, and thus about control over compliance, confidentiality and data privacy. Think about personal data that your business might have to “manipulate” and GDPR for instance; large US cloud solutions have had to set up data centres in Europe for this very reason.

It seems on-premise deployments can give you more control, but it comes at a cost.

You have to acquire the hardware and software, master the installation and configuration, take care of the maintenance, backup, and recovery plans. So, the overall ‘Total Cost of Ownership’ might be higher with on-premise than with a SaaS deployment - a similar type of factor you would be facing when debating buying or building an SCA software solution.

Additionally, you need to think about time to market. An on-premise solution will likely take longer to roll out than a SaaS solution.

Consuming a service on the cloud via an API is much faster. Speed of implementation is the main advantage of SaaS solutions: they are nearly ready to use.

The implementation is also leaner. It’s all about understanding and implementing APIs. It’s then “easy” to replace one service by another by switching APIs. Regarding costs, the infrastructure and security costs are spread amongst the SaaS customers, making it an attractive option to explore.

SaaS allows a business to scale at short notice. That makes SaaS more agile than on-premise.

Of course, SaaS is a good option as long as there are no heavy customisation needs. If customisation is required, the key for any company going for a SaaS deployment is to have a good communication channel with its SaaS vendor, so that future needs are discussed and taken care of in the roadmap. It is also up to the vendor to make the solution flexible enough to allow some customisation via specific APIs; if it makes business sense.

There is no straight forward answer, as it very much depends on the business requirements, decision criteria and …yes… ”business culture”. We have seen fintechs going on-premise, and larger, established organisations going SaaS.

When it comes to SCA, we see that SaaS is popular, and also an excellent option to start with, test the technology and ramp-up. Switching to On-premise can be an option once the solution is in production.

For many products, the product offering for the SaaS option is a bit different than the On-premise option. With the Okay SCA solution, the on-premise option includes fallback support and magic link support, which are not a part of the SaaS option. Additionally, the SaaS option offers a REST API, while On-premise also provides a SOAP API. Thus, when choosing between SaaS and On-premise, the product features offerings are an essential part of the evaluation.

Where do you stand on the question? Please send us an email with your thoughts, or join the conversation on LinkedIn.