As ERP technology continues to evolve in 2025, the decision between SaaS (cloud-based) and on-premise ERP is becoming more strategic than ever. The lines are shifting, and while many suppliers are leaning toward the cloud, on-premise ERP still holds its ground in certain situations.
Here’s what’s trending—and how the pros and cons stack up today.
SaaS ERP in 2025: More Than Just the Cloud
Trending Pros:
AI & Automation Built In
Modern SaaS ERPs are now bundling AI tools for demand forecasting, automated purchasing, and intelligent alerts—features that used to require third-party add-ons.
Faster Time-to-Value
Vendors have improved onboarding tools, templates, and migration support, cutting typical deployment times dramatically—even for distributors with multiple warehouses or product lines.
Enhanced Mobile Capabilities
In 2025, SaaS ERP is fully mobile-first, with native apps designed specifically for yard crews, delivery drivers, and job-site tracking.
Subscription Flexibility
More SaaS providers now offer usage-based or tiered pricing, making it easier to scale during busy seasons without long-term commitments.
Ongoing Cons:
Data Residency Concerns
Some suppliers working with government or large contractors still face restrictions on where data is stored—something SaaS can’t always guarantee.
Long-Term Cost Uncertainty
Subscription pricing can become a pain point over time, especially if you need multiple add-on modules or extra user seats.
On-Premise ERP in 2025: Still an Option for the Right Business
Trending Pros:
Custom Hardware Integration
Companies using legacy scanners, batching systems, or yard control hardware still find on-prem ERP more adaptable.
Greater Control for Data & Compliance
Businesses under strict regulatory environments or managing sensitive infrastructure contracts may still require in-house control over data and infrastructure.
Extended Lifecycle for Existing Systems
Many distributors have doubled down on extending the life of on-prem ERPs with hybrid integrations—adding cloud-based analytics or mobile dashboards on top of stable core systems.
Emerging Cons:
Falling Behind on Features
Most new innovation is focused on cloud systems. On-prem platforms in 2025 often lag behind in AI, mobile UX, and integrations with modern tools like CRMs, e-commerce, and field service apps.
Higher Cost of Maintenance
Finding skilled IT support for older on-prem ERP platforms is getting harder and more expensive. Hardware refresh cycles also add to the total cost of ownership.
Limited Agility
As markets shift faster, on-prem systems make it harder to quickly add new locations, tools, or sales channels without major rework.
Final Verdict in 2025
In 2025, SaaS ERP is now the default choice for most growing and mid-sized building materials suppliers—especially those focused on mobile access, fast deployments, and lower IT overhead. But on-prem ERP still holds value for businesses with highly customized infrastructure, regulatory requirements, or long-standing internal IT investments.
The decision isn’t just about where your ERP runs—it’s about what kind of business you’re building next.
