Differentiate SaaS from on-premises software.

• A. SaaS is hosted by a provider and accessed via the internet; on-premises is installed locally on an organization's hardware.
• B. SaaS is installed locally on organization hardware; on-prem is cloud-based.
• C. SaaS is only for consumer apps; on-prem is for enterprise apps.
• D. SaaS requires no internet; on-prem requires internet.

Answer: (A)

SaaS vs. on-premises primarily comes down to where the software runs and how you access it. SaaS is hosted by a service provider in the cloud and you use it over the internet; the provider takes care of infrastructure, maintenance, upgrades, and security, usually with a subscription model. On the other hand, on-premises software is installed and runs on your own organization’s hardware in your data center, with your team handling installation, updates, security, and ongoing maintenance, often with upfront license fees.

This distinction is why the statement describing SaaS as hosted by a provider and accessed via the internet, while on-premises is installed locally on organizational hardware, is the best fit. The other descriptions misrepresent the setup: SaaS isn’t installed locally and isn’t cloud-based in the opposite sense, and SaaS isn’t limited to consumer apps—enterprise apps use it too. Also, SaaS generally requires internet access, whereas on-premises software can operate without internet connectivity.