Choosing the right cloud infrastructure is an important decision for any organization. Some organizations consider software on-demand or cloud solutions while others prefer traditional software.  

Over the years, cloud computing has become rapidly popular among businesses across diverse sectors. A large number of enterprises are moving towards cloud-based solutions to meet ever-growing market demands. With the advancement of modern technologies, experts believe that on-demand software can play a critical role in digitization and business transformation. Having said that, some organizations still rely on traditional on-premises software citing security and privacy issues. 

So, which is the best option, cloud-based on-demand software or traditional on-premises software? Let’s find out in this detailed comparison. 

What is Software On Demand? 

Software on Demand, also called Software as a Service (SaaS) or cloud solution, is an online software delivery model. These systems are hosted by a third-party provider and made available to customers over the internet. Instead of installing and running solutions on their own computers or servers, customers access the cloud software through a web browser or mobile app.  

Besides, the cloud software provider is responsible for maintaining the software, ensuring its availability, and handling upgrades and security. Users have to pay on a subscription basis to acquire specific features. 

Software on Demand is a cost-effective approach that eliminates the need to purchase and maintain on-premises hardware and software infrastructure. Some examples of popular SaaS products include Salesforce for customer relationship management, Google Apps for productivity and collaboration, and Dropbox for file storage and sharing. 

What is Traditional Software? 

Every software that a company purchases and installs on its on-premises infrastructure are traditional software. It is popular among businesses that belong to highly regulated industries with high stakes. These businesses cannot afford to risk their data security and take robust measures to protect their systems from cybersecurity threats.  

One key benefit of traditional software is that the data is stored in in-house servers. This means all systems and solutions used by employees are installed in the company’s self-owned infrastructure which is not shared with anyone outside that firm. 

As a result, traditional software limits access to software, data, or required features to devices connected to the official network only. This means employees cannot access these resources when they are not linked to the approved IT infrastructure. It ensures greater network security and data privacy at the cost of limited accessibility. 

Differences Between Software on Demand vs. Traditional Software 

Check the below table to learn what differentiates on-demand or cloud software from traditional software: 

Criteria Software on Demand Traditional Software 

Delivery Method 

Accessed over the internet on a subscription basis Installed on a user’s computer or a server on a one-time purchase or licensing fee 
Deployment Third-party cloud server On-premises or in-house 
Pricing Method Subscription-based with recurring monthly or annual fees Upfront one-time purchase or licensing fee with potential ongoing maintenance or upgrade costs 
Infrastructure Ownership Owned and maintained by the cloud software provider Owned and maintained by the user or their IT department 
Control Limited control over data and encryption keys Extended control over data 
Software Updates Handled by the cloud software provider Handled by the user 
Customization Options Limited ability to customize or modify the software to fit specific needs More flexibility to customize or modify the software to fit specific needs 
Accessibility Accessible from any device with an internet connection Accessible only from devices where the software is installed 
Scalability Easy to scale up or down based on user needs or demand Difficult to scale up or down as it requires additional purchases or hardware upgrades 
SecurityResponsibility of the provider, but users are still responsible for their own data security Responsibility of the user with potential security risks if not properly managed 

Benefits of Software on Demand or SaaS 

On-demand software offers the following benefits: 

  • Cost-efficiency: On-demand software follows a subscription-based model that avoids large upfront costs. Hence, this model allows for greater predictability in budgeting. 
  • Scalability: With SaaS, businesses can easily scale up or down based on their changing needs without the need for additional hardware or software purchases. 
  • Accessibility: SaaS applications are typically accessed over the internet which allows users to access them from anywhere with an internet connection.  
  • Upgrades and Maintenance: Businesses can avoid the costs and headaches of managing their own software upgrades and maintenance 
  • Integration: SaaS providers often offer integration with other software applications to streamline workflows and increase productivity. 

Benefits of Traditional Software 

Given below are the key benefits of using traditional software: 

  • Customization: Traditional software can be customized to fit the specific needs of businesses with unique workflows or specific requirements  
  • Control: With traditional software, businesses have more control over the software and their data, as it is stored on their own servers or devices.  
  • Offline Access: Traditional software doesn’t need an internet connection and allows users to operate in areas with unreliable or limited internet access. 
  • One-time costs: While traditional software often requires an upfront investment, businesses typically only need to pay for the software once, rather than repeatedly. 
  • Performance: Traditional software can often offer better performance and faster response times, as the software is installed locally on the user’s device or server. 

Final Words 

Both cloud applications and traditional software have their own strengths and weaknesses. Making the right choice between these two different software delivery models becomes a huge challenge for businesses. However, companies can decide by considering their enterprise requirements, budget, and desired objectives. 

For instance, if you are a startup with a limited budget and small workforce size, software on demand will be the right choice for your company. This will enable you to access your required features without investing in expensive IT infrastructure. Besides, you can also scale up your system as your business grows in the future. 

On the other hand, large organizations with well-established setups should go for traditional software to ensure extended data privacy. This will also offer better customization options and extended control over software features.