SaaS or Self-Hosted: Deciding on the Best Fit for Your Business

As an entrepreneur or business owner seeking to establish an online presence for your business, the first logical step is often to think about getting a website. However, beyond that initial thought lies a more important question: the implementation process. Should you build and self-host the website from scratch, or would it be better to subscribe to a cloud-based solution?

In this article, I’ll walk you through everything you need to know about self-hosting vs SaaS to help you make the best decision for your business.

What is SaaS?

Software as a Service (SaaS) is a method of software delivery where a Software company hosts an application on a cloud server and makes it accessible to users without requiring any local installation. It could further be described as a model in which access to software over a cloud server is subscription-based.

SaaS is one of the three main categories of cloud computing, and of course, the most popular because it is a cloud-based solution that offers users ready-to-use software, eliminating the need for application infrastructure management. For this reason, it is the topmost in the stack of cloud computing services, having the highest level of abstraction.

How does SaaS work?

The operation of SaaS is simply a case where a cloud service provider owns networks, servers, databases and other cloud computing resources that are made available to clients and users for a fee.

To further illustrate this, consider large tech companies like Google and Microsoft, which offer cloud-based products such as YouTube Music, Google Drive, and Microsoft 365. With this consideration, users can listen to their saved playlist without having to store these songs locally on their devices. In the same vein, you can store up to 15GB of data across Google platforms using Google Drive. So, what’s happening here is simply access to a third-party service on the internet, where the application and data of users are stored in a central database by the cloud service provider.

The key feature of SaaS is its flexibility and utility across various sectors, including financial management, customer service, healthcare, marketing and logistics, E-commerce and sector you can think of.

What is Self-hosting?

Self-hosting is a deployment model in which the installation, running, and maintenance of software is carried out on a privately owned server or infrastructure.

How does Self-hosting work?

As opposed to SaaS, self-hosting implies that an individual or company is solely responsible for their software, which is not hosted on a third-party cloud service. It can be likened to storing files locally on your device, where all data is managed internally.

In Self-hosting, the individual is responsible for the hardware, installation, maintenance, update, backup and security of their data and software. This approach can enhance data privacy and control, and like SaaS, self-hosting can also be utilised in a variety of sectors.

Which is Best for me?

There might not be a perfect way to outrightly say which is better than the other because it all depends on business needs. However, here is a general comparison of both models

Cost

When analysing the cost on a short-term basis, SaaS presents a more cost-effective approach, as infrastructure and setup costs are included in the subscription fees, which are typically paid monthly or annually. This makes it a budget-friendly solution, especially for small businesses that may not prioritise parameters like data control or customisation.

In the case of self-hosting, the initial cost is usually higher since hardware, licensing, installation, and other configurations are paid for separately, which may be a barrier for small businesses. However, when assessed in the long run, self-hosting can become more cost-effective because SaaS subscription fees may accumulate over time, whereas licensing and infrastructure costs for self-hosting are often one-time expenses.

Customisation

Considering that SaaS models are designed to serve a large number of users, deep customisations are generally not expected. SaaS customisations are usually basic and limited to features permitted by the provider, which may vary depending on the subscription level. While this may not pose a problem for some users, there is a tendency to become locked into the provider’s available features and limitations.

Self-hosting gives users the flexibility to customise their application, whether on the frontend or backend. They can create custom fields, integrate APIs, modify the user interface, and perform any other customisation that suits their specific business needs.

Reliability and Maintenance

SaaS is generally more reliable, due to support from professional teams and always-available customer service that ensures quick maintenance and resolution of glitches, thereby improving system performance and uptime.

In self-hosting, reliability and maintenance depend on the expertise of the internal team, and achieving high uptime also relies heavily on the quality and robustness of the system's infrastructure.

Security

The cloud service provider manages the security of SaaS applications, and the approach to data handling plays a crucial role in determining the system’s safety. However, because the data is stored and controlled by an external provider, the possibility of unauthorised access or data breaches cannot be eliminated.
Self-hosting offers a higher level of data confidentiality, as the data is stored on local servers and managed internally. This allows for more direct control over access and enables organisations to implement custom security measures tailored to their specific needs.

Conclusion

Having explored both deployment models and their unique advantages, you should now be better equipped to critically assess your business needs, set clear priorities, and determine the most suitable solution to implement.