On-premises service under SaaS means the software is delivered on a subscription basis (SaaS model), but instead of running on the vendor’s cloud servers, it is installed and operated on the client’s own infrastructure (on-premises deployment).

SaaS Subscription Model:
  Clients pay a recurring fee (monthly or yearly) instead of buying a permanent license.
  The vendor provides continuous updates, patches, and technical support.
  SLAs (Service Level Agreements) guarantee performance and reliability.

On-Premises Deployment:
  The application and data are hosted inside the client’s own data center or private servers.
  This gives the client full control over data security, compliance, and customization.
  Critical for industries like banking, healthcare, or government where regulations restrict cloud storage.

Combined Benefits:
  Clients get the ease and flexibility of SaaS (subscriptions, automatic updates, vendor support).
  At the same time, they retain the control and compliance advantages of on-premises systems.