On-premise, IaaS, PaaS or SaaS? The Choice That Defines IT Infrastructure

The material was created in cooperation with MAIN (MAIN.PL)

As some organizations struggle with unexpectedly high costs, others with integration challenges, and still others struggle with security and regulatory issues, a comprehensive understanding of the implications of each of these cloud service models can be critical to the success of your entire IT infrastructure.

From this comparison you will learn:

• How Growing Resource Demand Affects Costs Across Service Models

• Why Safety and Regulatory Issues Can Block Early Development

• How the speed of deployments can be hampered by the constraints imposed by selected cloud service models

• What elements should you take into account to avoid overpaying while maintaining flexibility?

Unpredictable growth in expenses can be one of the most painful consequences of a poorly designed IT infrastructure. A seemingly beneficial solution can, over time, significantly burden the budget, especially when the number of users and the scale of processed data grows faster than expected.

How can different service models impact an organization's finances?

On-premise

• The large initial costs of purchasing servers and software in an on-premise model will not necessarily be justified in the long term, especially if the growth dynamics do not match the initial assumptions.

• Planning the infrastructure for maximum but infrequent load generates costs proportional to the “headroom” that will not always be fully utilized.

IaaS

• The cloud bill in the IaaS model grows in proportion to the number of instances and the amount of data, which allows for a quick response to the company's needs, but on the other hand requires constant supervision.

• Using an IaaS model means that any additional features, such as backup or advanced security options, may require a separate subscription.

PaaS

• In a PaaS model, the platform provider takes over administrative responsibilities, so development teams can start writing and deploying code almost immediately.

• PaaS billing is convenient at the beginning, but when a company starts conducting intensive experiments, they can start to consume an increasingly large part of the budget.

SaaS

• Many companies choose the SaaS model due to its low initial costs, but with larger scale operations, monthly fees can exceed even classic models if no limits or procedures for managing the number of users are set.

• As part of the basic subscription, the provider usually offers only the most popular integrations, and advanced scenarios (e.g. synchronization with ERP) require additional fees.

The most problematic situation is when a company selects a specific model with relatively low start-up costs in mind, and only after some time notices that the costs begin to grow rapidly.

MullenLowe MediaHub Agency Case

An example of the transition from an on-premise model to outsourcing in the IaaS model is the story of the MullenLowe MediaHub agency, which for some time focused on its own infrastructure. At a certain stage of development, the server resources it had were no longer sufficient and it was decided that continuing this model would be ineffective. At that time, the decision was made to abandon its own server room in favor of leasing the environment in an external data center.

The arguments for this change included not only lower costs (subscription instead of purchasing the equipment yourself), but also issues such as transferring responsibility (for servicing the equipment, creating backups, etc.) to the supplier.

Security and regulatory threats

In highly regulated industries (such as finance, medicine, public administration), choosing the right infrastructure is crucial to meeting requirements such as data security audits, encryption, and physical environmental security. Mistakes in this area can result in serious sanctions and, in extreme cases, loss of customer trust and blocking of further development.

How do service models address data protection requirements and industry regulations?

On-premise

• Complete freedom in shaping security policies allows you to adapt security mechanisms to unique industry requirements.

• Independent management of hardware and software in the on-premise model requires an extensive team capable of meeting strict standards such as NIS2.

IaaS

• Certified data centers and freedom to choose your region make it easy to stay compliant with local regulatory requirements.

• Disaster Recovery mechanisms are often available as ready-made solutions, making it easier to meet regulatory requirements for business continuity.

PaaS

• Handing over the maintenance of the environment to a vendor allows you to focus on functionality, but does not relieve you of the responsibility for protecting the code and data.

• Periodic vendor patches streamline maintenance, but each patch requires verification for compliance with industry and company guidelines.

SaaS

• Reduced burden on IT departments results from the fact that the provider takes on a large part of the tasks related to application maintenance and protection.

• Integrations with other systems (e.g. for the exchange of sensitive data) must be carried out taking into account regulations.

Turbine Analytics’ history illustrates how complex the rigors of the financial sector can be. The organization analyzed investment data for institutions, which required not only meeting strict regulatory standards but also being prepared for potential failures.

To reconcile flexibility with regulatory requirements, the implementation team opted for an IaaS service model combined with a precisely designed Disaster Recovery solution. The ability to define the geolocation of data and automatic replication to a backup center proved to be key. Thanks to this, Turbine Analytics retained full control over critical information, while gaining the freedom to quickly scale resources in times of increased demand.

Limited flexibility and long implementation times

The limited ability to quickly implement new features and system changes is often as significant a problem as unexpected cost increases. When tools prevent efficient configuration modifications or the addition of additional components, the development of key initiatives slows down. As a result, the company cannot keep up with customer demand or expectations.

How do different models perform in this context?

On-premise

• Full control over hardware and software makes it easy to implement custom solutions, which is useful when off-the-shelf cloud services do not meet the unique requirements of a company.

• Adding new resources to the data center often requires the involvement of the infrastructure department, administrators and support teams, which generates multi-step procedures and delays production readiness.

IaaS

• The ability to freely create and modify instances and select parameters (e.g. vCPU, memory, disk) allows you to effectively adapt the infrastructure to the nature of the application.

• Connecting IaaS to on-premises systems or third-party services requires appropriate network development, which requires appropriate virtualization knowledge.

PaaS

• The default set of databases, middleware, or CI/CD tools may not be enough if the application requires specific software from outside the ecosystem.

• When an application requires profound architectural changes, the framework set by the PaaS provider may prove to be too narrow, forcing one to look for other solutions.

SaaS

• The biggest advantage here is rapid implementation, although limited customization options may require compromises or complex integrations.

• The user has no control over the release cycle – updates and new features appear at a pace chosen by the vendor.

All of these models provide a different level of freedom in implementing changes – some allow for full customization at the cost of lengthy procedures, others allow for immediate action but impose a ready-made structure.

Integration Challenges and Vendor Lock-in Risk

Efficient integration of e-commerce, CRM, ERP, and partner tools is the foundation of a scalable business. If a cloud service model limits flexibility in creating interfaces and makes it difficult to synchronize data, an organization may be forced into costly workarounds or even a complete migration. Closed standards, limited interoperability, and difficulties in data export can turn initial convenience into long-term vendor dependency.

How do the different models deal with integration and vendor lock-in risk?

On-premise

• Independent compilation of tools and protocols allows for the freedom to create complex interfaces between systems from different manufacturers, minimizing the risk of vendor lock-in.

• The lack of pre-made connectors means that most integrations need to be built and maintained in-house, which takes up additional time and resources.

IaaS

• Connecting virtual environments with existing local systems provides an opportunity to create hybrid solutions that combine the advantages of the cloud and your own server room.

• Introducing standard data export formats and procedures (this may be an element of the so-called exit plan, already at the stage of signing the contract) reduces the risk of vendor lock-in, making any potential resource migration easier.

PaaS

• The tools provided in the PaaS model often work together without the need to create dedicated connectors, which significantly reduces the amount of integration code to maintain.

• PaaS is optimal for typical cloud applications, but in the case of unusual needs (e.g. specialized libraries), it is necessary to ensure detailed documentation that will allow for the free change of technology or supplier in the future.

SaaS

• Launching a SaaS system does not require installation or configuration, but connecting it with other tools often requires purchasing ready-made integration modules.

• Moving from one SaaS solution to another does not always offer a seamless export/import of records, which can lead to vendor lock-in, and the company may lose history or incur additional migration costs.

When choosing a specific cloud service model, it is worth determining in advance what integration with existing systems (on-premises and cloud) will look like, whether the provider uses open standards, and whether there are plans for a possible exit or transfer to another service in the future.

On-premise, IaaS, PaaS, SaaS: which model to choose?

The answer to the question of which cloud service model to choose depends on the planned projects, IT team resources, legal requirements, and long-term development vision. No one option is universally “best” – what works for one organization may be a real burden for another.

For this reason, consulting with IT experts may prove to be the most sensible move. MAIN specialists will help you precisely assess which model – or combination of models – best fits the vision of the organization’s development. Thanks to this, investing in IT infrastructure will contribute to real savings, instead of being a source of stress and unnecessary expenses.

The material was created in cooperation with MAIN (MAIN.PL)