"Third: Package it nicely.
Ideally, your customer should be able to download a zip with an executable and some config files from a well designed enterprise page - or get a URL to a Docker Repo. When your on-premise version starts for the first time, it should set itself up as autonomously as possible:
Check if it has the required access and permissions, connect to the database to set up tables, have sensible log output etc."<p>LOL that paragraph hides all of it. On prem means that someone is administering your application that does not understand it. Which means YOU are administering it but via slacking with your customers infra engineers rather than through your own control plane.<p>The article is right that there are customers who require this and if you want them you'll have to figure this out, but it is a huge pain in the ass and should be avoided if at all possible.
I work where we still have on-premise offerings, and we’re in a crisis because of it.<p>I am <i>not</i> against on-prem offerings, in fact quite the opposite. However, a significant swath of our customers are small-to-medium size businesses, and many don’t have access to qualified IT to run sophisticated software systems. Our contractual stipulations are very lax in terms of requiring customers to keep their hardware, software, and environment in a conducive, working order; we recommend ____ but if you fall out of spec, you assume the risk. Fine, except our contracts still put us on the hook to make sure, with reasonable effort, that the software is running. That means we spend our sparing and critical resources trying to cut pared down or specially tailored copies of our deliverables and trying to log into countless boxes to troubleshoot every banal and tedious tech support issue as to why a package isn't running or won’t install (spoiler: it’s almost always environmental: GPO restriction, firewall rule we told them we need an exception for, antivirus problems, dependencies not installed, excruciatingly out of date system, etc).<p>These two things are <i>not compatible</i> especially as software evolves and becomes more reliant on other services. The problem is that early on the organization decided to bend over backwards to make sales, now we have to choose between letting this problem spiral out of control and drag us down with it, or renegotiate the contract with better/clearer requirements or ditching on-prem which will be a mess and probably result in losing customers. That especially sucks for many of those customers, because they live in areas with poor connectivity.<p>Moral of the story: if you give your customers enough rope to hang themselves with, you’re also measuring out a length for yourself.
We are selling SaaS/B2B and are looking to support both modes moving forward. Our (my) preference is heavily tilted towards cloud, but we've modeled things to minimize our pain for on-prem.<p>Path A: Run a windows server VM and SQL Server somewhere in our customer's infrastructure. Our customer is 100% responsible for the health of these items and provides them as a service to us. Our customer has to notify us of any infra or app issues reactively.<p>Path B: We operate as custodians in our customer's Azure tenant. We deploy our software as a Function app and use Azure SQL. We are 100% responsible for the health of everything. Our customer is notified proactively of any issues.<p>To support both paths, we have two different executable project types (console app and azure function app) that consume a common library type. Only the barest boilerplate code actually changes between on-prem and cloud. 99% of the difference is HTTP Trigger function vs AspNetCore hosting syntax. Everything else is identical.<p>We work with small US banks and we haven't found one that is total stonewall against moving to cloud. Many are cautious but open. The #1 concern is the PII/data. We've been working with a few angles to cast that in a more realistic light. Most of our customers have had some degree of an incident with on-prem infrastructure that could have been made impossible if business was being conducted via a cloud provider.
There's a lot of really great SaaS products that get no traction in companies I've worked in.<p>Largely because "control your workflow" (a-la the toyota method) requires that a vendor is unable to change things on your behalf without your knowledge.<p>"On-prem" is about being permitted to invest your own resources into ensuring that your $thing will work during the hours it needs to work and you can pour as much or as little into the problem as you deem necessary.<p>If you use a SaaS you must somehow figure out how that factors into <i>their</i> pricing model and it's still largely their whim, and worse: they will still change things without notice.<p>It's also true that a lot of companies do not assume that the internet is always available.<p>Getting 100Gb/s to a server room is easy for 500 people in an office building.<p>But getting 100Gb/s to your SaaS platform might not <i>even be possible</i> without rearchitecting. (IE: Perforce in game dev, usually on-prem.)
Building an on-premise deployment requires a maturity of company that is quite rare for a startup to have:<p>* It’s much easier to do on-prem if you do a monolith, or at least a small number of services.<p>* You have to build and test your application against a range of OS and hardware combinations. You’ll almost certainly need to support RHEL, and probably Windows Server 20XX. Many companies won’t let you use Docker.<p>* Your software need to be tolerant of infrequent updates. Customers expect some level of stability in practice.<p>* You need to integrate licensing checks.<p>* You need to build an installer (that works out of the box…)<p>* You’ll need to agnostically support the common parts of SAML/OpenID for Auth only, and not rely on any bespoke features from a commercial provider like Auth0 or AzureAD.
Just bear in mind the kind of enterprise customers that tend to want on prem software _do not_ want to spend a lot of time deploying or maintaining it but the _do_ want you to support the old version that they're running (meaning security updates and probably fixes for major bugs). It's a very different world from your typical CI/CD SaaS product that deploys frequently and only supports the latest version of the software.<p>The company I'm with supports our releases for two years, most of our products release quarterly, and many of our customers are kind of annoyed because we release too often (in their eyes). We're looking at getting out of supporting the on-prem game, but personally I think it's unlikely because many of our clients are in government and defense.
I work for a Healthcare SaaS, and our requirements around where data can live are so strict we can only use applications that we can self-host. For us this means Helm chart and installed on k8s.<p>I'm honestly shocked that Sentry, for example, doesn't have a self-hosted enterprise option. We're all terrified of PHI being caught in a stack trace and sneaking through any PHI-scrubbing feature. We had to move off of Confluent because CFK's pricing is outrageous compared to Confluent Cloud. It's clearly designed to nudge customers towards Cloud, but we can't use it due to contractual requirements with customers. Everyone is so anxious about breaches that even a BAA doesn't cut it anymore.<p>So there's absolutely a market for this kind of stuff.
Our company does this and it has become a competitive advantage allowing us to get into customers that would otherwise be out of reach. Pretty much every single current offering is SaaS-only so if you want a modern product on prem we're essentially the only game in town.<p>Operationally speaking we built the products from the ground up to be available either way (at the time, it was a less contrarian take). The resulting cloud architecture is not multitenant (just high efficiency, orchestrated shared hosting). "Multi single tenant" I think they call it these days.<p>I think its an extremely pragmatic albeit unpopular choice for a B2B SaaS company.
Funny that the article focuses on huge corps for on-prem. I work for a non-profit and we deploy stuff to hardware in Afghanistan, Haiti, Sudan... You can't assume the Internet works and if it does, it could be a 1Mbps VSAT connection.<p>Needless to say we don't have a Fortune 500 budget. When I see a nice, affordable app that says "and here's a Docker image!" next to the SaaS options, I am like ( ˘ ³ ˘ ) ♥
You <i>really</i> have to have your ducks in a row to roll a cloud solution as an on-prem solution. I've participated in two rollouts like that - where it was a solid cloud product that we arranged to buy as on-prem - and both were pure failures. "Pure" as in "no one managed to even make the thing work, <i>once</i>, and then gave up".<p>This comes back to nontechnical leadership, as business process issues tend to do.<p>Leadership has something cool, they think "what's cool for us is cool for everyone", and then they try to sell into a market that maybe doesn't do cool in exactly the same ways. Take something like SAP B1P or JIRA. Both established or very powerful cloud apps. You'd be tempted to think that anyone in manufacturing would want some of this . . but then you <i>have</i> to build everything so that it's able to be portable-ized, which adds a <i>ton</i> of development time, and an ongoing maintenance cost that also involves headcount/travel/US persons/security clearance.<p>How do you know if that cost could be justified? Well, that's where "nontechnical" comes in. The right way is matching up costs of dev and maintenance with what the industry will minimally pay. The wrong way - which seems dominant - is to use your Leadership Spidey Sense to determine whether or not to take the plunge. Then you get stuck in, you short the dev or the maintenance, and end up with a platform not optimized for either cloud OR on prem.
Nice writeup and plenty of good points made. However, the author left out one huge item in terms of why On-Premise is challenging: ongoing support and maintenance.<p>I was an engineer on a product that had an On-Premise (OP) offering. Some of our biggest moneymaker accounts were On-Premise and liked the product.<p>The downside was that we had to have a dedicated team just for On-Prem stuff. I was one of the engineers on that team. We had to develop custom management interfaces for the software that were only deployed in an On-Premise environment. It wasn't crazy hard or anything but it was time and effort.<p>Upgrades and installation were also a big track of work unto themselves. When you deploy into an On-Premise environment you are completely at the mercy of the clients infrastructure. One support call I did was clocked at 14 hours - there are so many things that can come up. Plus there's the whole hassle of actually getting the calls scheduled and making sure clients aren't too many versions behind.<p>Sometimes we had to spend a lot of time waiting on support calls because the customer didn't have their stuff together. Like sitting and waiting for a network team to open up the firewall so that bits could be downloaded from our distribution server. And of course the firewall had to be closed up right afterwards, so this was a common thing.<p>Another time we spent weeks troubleshooting a client installation. In the end it turned out that the client had our software talking to two different internal NTP servers which were slightly out of sync, which caused our SSO/SAML integration to break.<p>Database migrations were also challenging - in a cloud environment you often have flexibility to migrate things live while the system is running. But often with the on-premise upgrades, you had to take the whole system down while the migration was running (back to the 14 hour support call). This could mean scheduling the support calls at really weird hours.<p>On-premise also has challenges if you start selling to the US government, especially defense. There are super strict requirements that support personnel must be US citizens on US soil - so hopefully you have more than one person on the team meeting this requirement!<p>All in all, I am not a detractor of offering an On-Prem solution. It can be a real differentiator and it will open a lot of doors. There are some companies that simply won't buy SaaS, either due to internal or regulatory reasons. Once you land these clients it can be very lucrative and long-term. But, it almost always requires dedicated staff to support and manage.
Big enterprise deals can be a huge burden for a small company. They’re demanding customers and they will probably pressure you into making product customizations that don’t apply to the rest of your target audience.<p>Enterprise customers tend to have more edge cases and scaling requirements, along with a huge workforce with more difficult lines of communication. Anecdotally, they seem to need more follow-ups and hand-holding than smaller nimble companies.<p>An ideal customer is often one that subscribes, pays their bill, and rarely asks you for help. Your product already solves their problem out of the box without needing to go down any rabbit holes.
On-premise is a sales & tech support minefield. That's why SaaS vendors don't like it. No matter how well documented an on-premise solution is, the customers won't read the docs and when something goes wrong the customer will be unhappy and blame the vendor. And unhappy customers are bad for business.<p>This is why consumer electronics products have those stickers that warn you you void the warranty by opening up the device. It's because nobody wants to deal with those customers who open up their device, break something, and then demand a replacement because the product is defective.
FYI, it’s “on-premises” or “on prem”.<p>“Premise” means something very different, so I recommend you use “on-premises” or “on prem” if you’re trying to demonstrate competence to the majority of your audience who will know the difference.
At a previous employer we used an on-prem version of a popular software offering. It was great, but we obviously had to have people managing it.<p>At my current employer I chose to use their cloud offering. I thought, hey, it's just me here, and I don't have time to sysadmin yet another thing. A few weeks ago I needed to enable the REST API, and for them to create a KVstore. On-prem these are 2-minute processes (set a value in a config file and restart the process). In the cloud offering, you need to make a support ticket. It took 17 days, and that's only because I ended up doing half of it myself -- they enabled the REST API first, and I found I could use the REST API to make the KVstore.<p>I have some regrets.
My employer is moving in the opposite direction, we want to move all of our customers from on-prem to our cloud. Not all customers might be happy, but many are. The customer doesn’t need to manage a server. The software gets a controlled, well-configured environment, and the customer can’t mess it up by installing random software or imposing half-assed IT policies. And our support people don’t need all the security theatre involved with accessing the customer network (VPNs, tokens, special laptops in the customer AD domain, etc…), they can just access the customer’s resources in our cloud and get to work.
As someone who evaluated software in the CI/CD realm for years working at an enterprisey company, not have an on-prem solution immediately disqualified you. We had to go through so much more red-tape to allow a SaaS offering in the enterprise it just wasnt' worth it. Yes, that's the enterprise for you. It's been a while since I've done that, so hopefully they've gotten better about it.
You can sell „private cloud” so you make separate server or servers for that specific customer.<p>On premise goes away and you can also setup private cloud to be filtered on firewall to give access to customer only or connect it via vpn or whatever else.<p>Biggest upside is that you still control deployment and are responsible for uptime but you have best knowledge in-house to deal with it.
> On-Prem has a whiff of the olden days. Of IBM mainframes, SAP and Oracle DBs.<p>Off-prem feels that way to me. It's "the mainframe" run by the off-prem vendor. I have a dumb terminal.<p>On-prem seems so much easier in today's corporate IT environments. Ship the Customer a VM. Use SAML for auth. Interact w/ clients over HTTPS.
ObNote that in standard English it's "premises," even for a single building. Some explanation here: <a href="https://ahdictionary.com/word/search.html?q=premises" rel="nofollow noreferrer">https://ahdictionary.com/word/search.html?q=premises</a>
We (www.polytomic.com) have an on-premise offering in parallel with our hosted version.<p>It's worked out fine for us (of course there are tradeoffs but for us they're manageable). Definitely requires an investment by people who know what they're doing as the article alludes to.
> And ultimately, having an on-premise version unlocks certain industries that will simply not buy SaaS under any circumstances. These are specifically security critical industries like Defense, Banking, Insurance etc. - all of which come with sizable software budgets.<p>You're putting the cart before the horse. The only places still making money off of on-prem installations are <i>charging a premium</i> for it. If a big government account comes up and offers to pay you extra for a special service contract, you're going to do it.<p>I get the appeal to developers of just throwing out a self-service experience with minimum commitments. But it's not a good, sustainable business model on its own.
I just hope everybody knows that "on-prem" means about 10,000 things when it comes to installs and integrations. And that's why small b2b teams should focus on SaaS first. You don't want to build 10k versions of your product. Just one. It's easier to iterate to get to PMF, and to maintain once you reach it. When enterprise customers ask for on-prem, that is sometimes a signal that they a) want lots of consulting professional services (sometimes free), and b) are not sophisticated customers. You want to serve the laggards last, once you can take cash flow from a more efficiently sold product and adapt it to idiosyncratic environments.
If I have a choice between a company that sells SaaS and a company that offers an on-prem option, the latter gets my business.<p>If you aren't confident enough in your software to hand me that code in an install file, I guarantee I don't want to rely on your janky startup's hacked-together spaghetti.
Since this is a topic that’s near and dear to my heart, going to quickly plug my own startup that’s doing exclusively this: www.sentineldevices.com. We make industrial equipment smart enough to self-monitor and self-report issues using AI, but we are specialized in making AI that does EVERYTHING (including training) on embedded devices (think something only marginally more powerful than an RPi 4) so we never call out to a server. As the article notes, a big challenge has been making the AI and all support software resilient and able to “bounce back” from random occurrences in industrial environments (which can be extremely unpredictable and unique). Also as the article notes, this pretty handily opens up the Defense market since we don’t need to clear a cloud component.<p>Feel free to reach out at forrest@sentineldevices.com if you’d like to chat. We’re building and trying to take people on part-time if anyone’s interested in this space! Also if anyone just wants to talk about challenges in the space I’m happy to, HN usually gives really great conversation partners.
As the pendulum swings :)<p>I love the idea of on-premise for small startups (or solo startups) because it shifts the operational/oncall burden to the customer.<p>Also "on-premise" in 2023 can easily mean something deployable to a customer's AWS/Azure/GCP account.