As an independent ERP consultant, one question that I am always asked is, what the difference is between a cloud system, a SaaS system and an on-premise system. These terms tend to be thrown about a lot, and it is quite easy to be a little confused by them all. In this article, we aim to give you a better understanding of the terms so that you can gain a clearer idea of which one might be the best option for your business.

Cloud systems

Cloud computing is the buzzword within the software and hardware industry these days, and it can be quite hard to define. The easiest way to think of it is to think of the cloud being the internet. What this means is that if your system is cloud-based, you can access it from anywhere you have access to the internet; all you need is to be have an internet connection and a web browser to enable you to log into the system. A third-party business offering cloud services will host, store and process your data on their server enabling you to access it from wherever you want to.

The main benefit of a cloud system is that you no longer have to have your own server based at your office and only be able to access the data on the computer that it was linked to. You can now access it on your desktop, laptop, tablet, mobile from wherever you are – the office, home, a coffee shop or the airport. It allows you to grow your business in a much more flexible way. It will usually cost you less as well, as you just have to pay for space on the server and a subscription for access to your data, rather than having to invest heavily in hardware and software yourself.

Some examples of cloud systems are Amazon Web Services and the Google Cloud Platform.


SaaS stands for Software as a Service and is similar in many ways to cloud computing. You do not need to install and maintain the software yourself, but instead, pay a monthly subscription fee based on the number of users and level of service you require. The SaaS software is hosted and run by the SaaS company’s server and they are therefore responsible for the maintenance, performance and security of the software application.

Again, the benefits of SaaS are similar to cloud computing as it allows you to have multiple users have access to the same software without you having to worry about installing and maintaining the server yourself. You can also access the software you need from wherever you want as long as you have an internet connection.

Some SaaS applications you may have heard of are NetSuite and Salesforce.


This is the traditional way that ERP systems have tended to be run, with the servers located on your site, and the software installed on them when it has been purchased from the ERP vendor. You will have control over the servers and the ERP software yourself and will be responsible for both maintenance and management throughout its lifetime.

The benefits of this approach are that you own and control everything in-house and have full control over the data.

As with everything, there are advantages and disadvantages to all options. The best way to work out which option is best for your ERP installation is to work with a consultant who can guide you through the options. If you are thinking of installing an ERP system and want to talk it through with someone experienced, then please don’t hesitate to get in touch with us today. You can contact us by telephone on 0800 014 2870 or 0843 523 5630.