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SaaS WMS vs On Premise WMS for eCommerce

How To

WRITTEN BY Jonathan Bellwood /

06 May 2015

SaaS or On premise? On Premise or Saas? Picking warehouse management software is a big decision and there are a lot of questions to ask yourself. What is going to be theright choice for your eCommerce business? How will the system grow with your company? What are the limitations of each option? And which is better: Software-as-a-Service (SaaS) or On Premise?

What follows is a brief guide to where each system, SaaS and On Premise, really shines so you can make the right decision.

Speed of Deployment - SaaS vs On-Premise

Winner: SaaS

Quite often, eCommerce companies need to implement a warehouse management system quickly, especially if they’re changing eCommerce platform, too, and need the go-live dates to align. There is normally a period of time between March and September during which these companies have the availability to put a system in.

SaaS systems can not only be deployed quickly but also remotely in some cases which means the absolute minimum amount of time is needed on site. On premise solutions, on the other hand, can require up to 75 days on site for implementation.

[Related: 3 reasons to automate your warehouse]

Customising your warehouse system

Winner: On Premise

For larger companies who can pay the price, having logistics that set you apart from the competition can be a major advantage. On Premise systems can offer extensive customisation for companies, making their logistics entirely unique.

SaaS is generally less individual for each customer, although universal features can be turned on and off to suit their needs.

Cost-effective WMS


On paper, On Premise solutions can look more cost-effective compared to SaaS. You pay an upfront cost and then an annual maintenance fee which is a percentage of that initial cost. Over a 5 year period, this can appear cheaper than software-as-a-service. However, the percentage for the maintenance fee could fluctuate at any time with On Premise, and any additional upgrades, as specified earlier, will cost significantly more.

For SaaS, you pay an implementation fee, and then a recurring monthly fee for the number of licenses. What’s more, with SaaS you can increase or decrease the number of licenses to suit the demand and the pricing will change accordingly. On Premise solutions will only allow you to increase the maximum number of users without lowering it again. For eCommerce, with so many peaks and troughs throughout the year, this might not be suitable.


Winner: SaaS

The eCommerce industry changes daily so logistics need to be ready to keep up. SaaS operates on one code base meaning that the core team can focus on innovating, instead of spending time working on feature requests for individual clients like with on premise.

Think of cake. SaaS is a layer cake which can constantly be added to so every customer has the same share. On Premise is a cake that has been sliced up, with a separate piece given to each client. One client asks for chocolate sprinkles on their cake and then another client decides they want the same. In order to provide this upgrade, the software vendor has to work separately on each slice - and this won’t be free!

[Related: MetaPack Delivery Conference: 3PLs - Embracing innovation]

Older and wiser

Winner: On Premise

Like a good cheese or Keanu Reeves, On Premise warehouse management systems have aged well. And with their age, they have developed a network of advisors that add real strength to their foundations. Despite these larger On Premise solutions being more difficult to implement, they often have a considerable number of partners who can consult with prospective clients to make the process easier.

IT overheads

Winner: SaaS

We’ve been around a lot of eCommerce companies in our time and it’s a rare sight to find a large IT department. The few IT technicians that are on hand in these companies often have a skill set particular to making their eCommerce platform look stunning. SaaS requires very little IT overhead as a team of experts on the vendor’s side are in place to manage the software for all clients.

Many On Premise vendors require the user to have an in-house IT team devoted to maintenance and backups etc. This either distracts the current technicians from designing, or it forces companies to spend more money hiring new people.

[Related: The future of eCommerce warehouse software]

Web connection


Again, this is another two-sided argument. For many companies, the idea that a warehouse system can be run on a simple internet connection is pure genius. In this day and age with the introduction of 4G (and perhaps even 5G?) getting a decent internet connection is incredibly easy.

For the more established companies, particularly those running mission-critical operations, the notion of their back-end being reliant on the internet is more unsettling than an ‘in school without any clothes on’ nightmare. Should the connection fail, processes are halted, so unless you’re willing to get a really decent, reliable network, On Premise is the safer option for mission-critical.

So who's the clear winner? Obviously it is entirely dependent on your business. When it comes to eCommerce, SaaS generally tends to be the best contender. What it lacks in unique customisation, it more than makes up for in price, ease of use and speed of deployment.

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