SaaS vs. Traditional Software Licensing Model

Software as a Service has been instrumental in harnessing benefits of productivity of man and organization in working environment by delivering a diverse range of remotely maintained applications over the Internet. Unlike Traditional Software Licensing Model, SaaS strives to resolve the inflexibility of software that arises during maintenance and evolution. Software as a Service model is user friendly and incurs comparatively lower cost.

SaaS vs. Traditional Software Licensing Model: Technical features and Support

Multiple Users: The SaaS model can be used by multiple users at a time, and operates on a subscription per user per month basis. It is quick to deploy as your only requirement is an internet connection, and you are ready to use your new software. On the other hand, the conventional model cannot be deployed immediately as software needs to be installed and user training is required.

Work from Anywhere: SaaS can be accessed from any computer or device at any time, the only requirement is an internet connection. This gives the freedom of working from anywhere and results in a more productive output. The application is mobile friendly and unlike Traditional Software Licensing Model applications, the learning curve for SaaS solutions is very low. Also online training on SaaS applications can be generated on demand.

Latest Updates: One major advantage of using Software as a Service is that at all times you will be using the most updated version of the software. There is no need of installing and managing software updates. And unlike on premise, you don’t have to wait for getting hold of the latest features and upgrades.

Reliability & Security: With SaaS, you can obtain guaranteed levels of service and performance. This model also offers automatic data backups and recovery, which is a meticulous process with regards to Traditional Software Licensing Model users. Automatic recovery and backup of information delivers a sense of security while using SaaS data centres and it becomes more reliable than the data management offered by in-house systems in the organizations.

NetLicensing Pricing Table

SaaS vs. Traditional Software Licensing Model: Financial implications

Less Costly: SaaS customers do not have to pay large upfront cost as it is based on a monthly subscription fee. This results in a better and long term customer relationship and a focus on customer satisfaction. Whereas in the case of Traditional Model, the initial costs are very high but there are no subsequent periodic payments required.

Less Investment: In case of on premise the higher costs include the costs of hardware, software and resources. However, as the SaaS software can be hosted from distant locations, no additional hardware requirements are there, which further minimizes the costs. This implies that the initial investment by organisations in Traditional Software Licensing Model is way more than in the SaaS model.

No Installation & Maintenance charges: Moreover, the installation and maintenance charges are nonexistent in SaaS, unlike the traditional software licensing model where the organizations have to include the set-up and installation costs. Management of IT infrastructure and hardware becomes a concern for organizations while using the traditional set-up. SaaS offers freedom from these concerns, as it is based on using services and software via the internet and no infrastructure is required.


Organizations should move forward in using the SaaS application, as by using it they get the freedom of investing in their projects better, rather than maintaining the infrastructure for on-premise software which is both complex and expensive. Outsourcing the Licensing part to SaaS providers makes the process much easier, as the security, performance and hardware management, all are dealt by the provider. SaaS provides the freedom of access as it is a web based software application delivery system. It can be used both as a business application and a development tool, and equipped with fresh innovative ideas; SaaS will soon outperform the Traditional Software Licensing model.

Image Credits: © tashatuvango -