Dynatrace Managed vs SaaS: Which One Should You Choose?

Introduction to Dynatrace Deployment Models

What is Dynatrace?

Dynatrace is a tool for monitoring and improving the performance of apps, infrastructure, and digital services. It helps businesses understand what’s happening across their systems in real time. Whether you’re running apps on the cloud, on servers in a data center, or a mix of both, Dynatrace gives you the data you need to fix issues fast and optimize performance.

With AI-powered insights and automation, Dynatrace goes beyond just alerting you when something breaks. It finds the root cause of problems and helps teams take action quickly. From user experience to backend code, Dynatrace shows you the full picture.

But not every business has the same needs. That’s why Dynatrace comes in two deployment options: SaaS (Software as a Service) and Managed (self-hosted). Both do the same job in terms of monitoring and automation, but how they’re delivered and controlled is very different.

Key Use Cases of Dynatrace

You’ll find Dynatrace used in all sorts of companies—tech startups, e-commerce stores, banks, hospitals, and even government systems. Here’s why:

• It helps IT teams keep apps and websites running smoothly.
• It alerts DevOps teams to issues before users notice them.
• It helps developers optimize code performance.
• It helps companies meet service level agreements (SLAs).
• It provides data to improve customer experience.

Choosing the right deployment model depends on the size of the team, security requirements, budget, and how much control you need over the setup.

Overview of Dynatrace SaaS

How Dynatrace SaaS Works

Dynatrace SaaS is hosted and managed entirely by Dynatrace in the cloud. You don’t need to install anything other than agents on the systems you want to monitor. All data is sent to Dynatrace’s cloud servers, where it is processed, stored, and analyzed.

This model is fast to deploy. You sign up, install agents, and start seeing data almost immediately. There’s no need to worry about managing the backend systems. Dynatrace takes care of upgrades, scaling, and availability.

Data is processed in real-time, and updates are rolled out regularly without user intervention. That means you always have access to the latest features and security improvements without having to do anything.

Common Scenarios for Dynatrace SaaS

Dynatrace SaaS fits businesses that want simplicity, speed, and low maintenance. Here are a few examples:

• Startups that need quick monitoring without hiring IT staff.
• Agile teams that release updates frequently.
• Cloud-native apps that are built on AWS, Azure, or Google Cloud.
• Companies with limited infrastructure to host tools.

SaaS is ideal for businesses that want to focus on using the tool, not managing it. But this convenience comes with trade-offs in data control and customization.

Overview of Dynatrace Managed

How Dynatrace Managed Works

Dynatrace Managed is deployed on your own servers, either on-premise or in your private cloud. You have full control over the infrastructure, storage, security, and network setup.

Unlike SaaS, this model gives you full ownership. You are responsible for installing the platform, managing hardware, handling backups, and maintaining uptime. Dynatrace provides the software and guidance, but you run the show.

It’s ideal for organizations that need tight control over data or have strict security rules. Everything stays within your network unless you choose to send data elsewhere.

Updates are handled manually or scheduled by your team. This gives you the ability to test new versions before going live.

Common Scenarios for Dynatrace Managed

Dynatrace Managed is a good choice when:

• You work in a regulated industry like finance or healthcare.
• Your company has strict compliance rules around data storage.
• You need to keep data on-premise for legal reasons.
• Your security team doesn’t allow sending data to external clouds.
• You want to control upgrade schedules and test features before rollout.

It’s not plug-and-play like SaaS, but it offers more control and flexibility for complex environments.

Core Differences Between Managed and SaaS

Deployment and Infrastructure Ownership

This is one of the biggest differences. With SaaS, Dynatrace runs the infrastructure for you. You just install agents on your systems, and everything else is handled by them.

With Managed, your team installs and maintains the entire Dynatrace cluster on your own hardware or virtual machines. You manage the servers, storage, and network. This requires more IT skills and resources.

If your business prefers not to manage infrastructure, SaaS is the way to go. But if you want to keep things internal and have an IT team that can handle it, Managed gives you more control.

Security and Compliance Considerations

In SaaS, your monitoring data is stored in Dynatrace’s cloud environment. That can be a concern for industries with tight regulations or sensitive data. Although Dynatrace complies with major standards, some companies can’t store data offsite.

Managed is better if you need to:

• Host everything in your own data center.
• Use your own encryption and access rules.
• Meet country-specific data laws.

SaaS is generally secure, but you lose some control over how and where data is handled.

Data Residency and Retention

Dynatrace SaaS stores your data in regional data centers. You can choose the region, but you can’t control the infrastructure. Data retention is based on the plan you choose.

With Managed, you decide everything—from the physical location of your servers to how long you keep data. You can also archive it offline or connect it to your own storage solutions.

This matters if your legal team wants full control over data handling.

Pricing and Licensing Differences

Cost Structures of SaaS

Dynatrace SaaS usually follows a subscription-based pricing model. You pay based on usage, which includes factors like:

• Number of hosts being monitored
• Volume of ingested data
• Retention period
• Custom metrics

This model is simple and predictable. There are no hardware or hosting costs since Dynatrace runs everything. You also avoid hiring staff to maintain servers or clusters.

For companies with changing needs, SaaS pricing is flexible. You can start small and scale up easily. However, over time, usage-based costs can add up, especially if you monitor a lot of hosts or services.

Another key point: since everything runs on Dynatrace infrastructure, pricing can sometimes include hidden costs like overage fees if your usage spikes beyond your plan.

Cost Structures of Managed

Dynatrace Managed licensing is typically similar in structure but with some additional considerations. You’ll still pay based on what you monitor and data volume, but you also have to cover:

• Infrastructure (servers, storage, networking)
• Internal IT resources for setup and maintenance
• Backup and disaster recovery systems
• Monitoring the Dynatrace cluster itself

These costs are often upfront, making Managed feel more expensive at first. But in the long run, especially at scale, Managed can be more cost-efficient for enterprises that already have infrastructure and staff in place.

You also get more predictability in data retention costs since you’re not tied to cloud storage rates.

Long-Term Budget Considerations

For small teams and startups, SaaS is usually more affordable short-term. You avoid upfront costs, and maintenance is handled for you. It’s easy to get started and pay as you grow.

For large enterprises, Dynatrace Managed may make more sense. If you already have a private cloud or on-premise data center, you can avoid ongoing SaaS fees. You also have more control over how resources are used.

The key is to look beyond the first-year cost and compare total cost of ownership (TCO) over three to five years. Sometimes SaaS starts cheap but becomes costly. Managed may seem expensive upfront but could save money later.

Performance and Scalability

Performance in SaaS Environments

In a SaaS setup, performance is closely tied to how Dynatrace manages their cloud infrastructure. The advantage? You don’t need to think about provisioning or scaling. It’s done automatically.

• You get access to new hardware and optimizations without lifting a finger.
• If monitoring volume increases, Dynatrace handles scaling.
• Processing and analysis speeds are optimized by their cloud systems.

But there’s a flip side. You depend on Dynatrace’s network performance. If your agents are in a remote region far from their data centers, you may see latency. Also, during peak usage hours, shared cloud resources might get slightly slower.

Still, for 90% of companies, SaaS offers fast, reliable performance out of the box.

Performance in Managed Environments

Performance in Managed depends entirely on the infrastructure you provide. If you invest in powerful servers and set up things right, you can get faster and more consistent results than SaaS.

Managed allows you to:

• Tune storage and processing for your workloads
• Use dedicated hardware for heavy workloads
• Isolate your monitoring systems from other apps

This setup is helpful for large enterprises or organizations with strict performance SLAs. However, poor hardware choices or bad configurations can lead to bottlenecks.

In short: Managed gives you more performance control, but you’re also responsible for achieving it.

Scalability Differences

SaaS scales automatically. Add more hosts, and the system adapts. That’s the big win with cloud-based models. You don’t worry about adding servers or storage.

With Managed, scaling is manual. You have to add new nodes, balance loads, and monitor resource usage. This adds complexity but gives you more control over costs.

So, if you expect massive growth or spikes in usage, think carefully. SaaS removes scaling headaches. Managed makes you plan ahead but may be more efficient if done right.

Control and Customization

Admin Access and Flexibility

Dynatrace SaaS limits some admin-level controls to keep the environment stable. You can set up users, dashboards, alerts, and workflows—but you can’t change how the core system works.

In Managed, you have root-level access. You can:

• Customize server settings
• Integrate with internal systems at a deeper level
• Control user access based on internal policies

If you want complete control over monitoring architecture, Dynatrace Managed gives you that freedom.

This is especially useful for teams that need fine-tuned control over security rules, proxy settings, or specific data collection strategies.

Custom Plugin and Extension Support

SaaS supports most Dynatrace extensions and APIs. You can build custom integrations, dashboards, and alerts. But some advanced plugins or system-level extensions might be restricted because the backend is controlled by Dynatrace.

With Managed, you can deploy any plugin, customize APIs, and even connect third-party systems directly to your Dynatrace environment. You also have more options for log routing, storage configuration, and internal API gateways.

This is crucial for enterprises with unique tools or complex workflows. Managed lets you build a fully tailored monitoring setup.

Maintenance and Upgrades

Who Handles Updates and Patches

In SaaS, Dynatrace automatically rolls out all updates, patches, and new features. You don’t need to schedule downtime or plan maintenance windows. Everything just works.

This is perfect for small teams or anyone who wants to stay up to date without doing any extra work.

In Managed, you’re in charge of updates. You get control over when to upgrade and what version to run. This is helpful if you want to test new versions before deploying them.

The downside? You need IT staff to handle updates, and if you delay too long, you may miss out on security patches.

Downtime Risks and Control

SaaS has high uptime because it runs on Dynatrace’s cloud. But you don’t control when maintenance happens. Occasionally, there could be disruptions or planned downtimes that affect your monitoring.

With Managed, you control everything—including maintenance windows, failover systems, and backups. If you set things up correctly, you can achieve better control over uptime.

However, that also means you carry the risk. If something breaks, it’s your team’s responsibility to fix it.

Security and Privacy

Shared vs. Dedicated Resources

In Dynatrace SaaS, your environment runs on shared cloud infrastructure. That doesn’t mean your data is mixed with others—it’s isolated—but the underlying resources (like storage and servers) are shared across customers.

This setup is secure and managed by Dynatrace, but some companies don’t feel comfortable running anything sensitive in shared environments.

In Dynatrace Managed, all resources are yours. Everything runs on your own servers or virtual machines. This allows for tighter control, especially when using private networks or restricted zones. You can also isolate the monitoring system completely from the public internet, which adds another layer of protection.

For industries like banking, defense, or healthcare, where resource isolation is key, Managed is usually the safer choice.

Handling Sensitive Data

With SaaS, you rely on Dynatrace’s cloud to process and store sensitive monitoring data. While their platform follows major compliance standards (like SOC 2, ISO 27001, and GDPR), it’s still an external service. If your company policies say no third-party data storage, SaaS may not pass internal reviews.

Dynatrace Managed solves this by keeping all data within your environment. You can apply your own encryption, audit logs, access controls, and retention policies.

This gives your legal and compliance teams peace of mind. But remember: you have to handle the responsibility. Data loss, leaks, or misconfigurations fall on your side.

So, if you’re handling medical records, financial transactions, or government logs, Managed provides the isolation and control needed to stay safe and compliant.

Integration and Ecosystem Compatibility

Compatibility With Third-Party Tools

Dynatrace integrates with hundreds of tools—CI/CD systems, ITSM platforms, observability stacks, cloud services, and more. Both SaaS and Managed support most integrations, but there are some differences in flexibility.

SaaS has tighter integration with cloud-native services, especially if you’re using AWS, Azure, or Google Cloud. It easily connects with their monitoring APIs and auto-discovers new services.

However, it can be harder to integrate with legacy systems or internal tools that sit behind firewalls.

Managed offers more freedom. Since you control the environment, you can create custom integrations, connect to tools inside your network, and even develop plugins for rare or outdated systems.

This is helpful for larger enterprises with custom workflows and in-house monitoring tools that need to work alongside Dynatrace.

Cloud-Native Integration Differences

If your entire infrastructure is in the cloud, SaaS makes integration smoother. Dynatrace SaaS supports native connections to:

• AWS CloudWatch, Lambda, EC2, and EKS
• Azure Monitor, App Service, Functions
• Google Cloud Operations, Kubernetes Engine

These connections are already built and maintained by Dynatrace, making the process nearly automatic.

Managed also supports cloud integrations, but it may require more setup. For example, you might need to configure proxies, access policies, or API tokens manually.

So, while both can connect to cloud platforms, SaaS has the edge if you’re going cloud-first and want fast setup with minimal effort.

Pros and Cons of Dynatrace SaaS

Benefits of SaaS

• Fast setup: No servers, no manual installations. You get started in hours.
• No maintenance: Dynatrace handles patches, scaling, and backups.
• Latest features: Updates are automatic, so you’re always current.
• Great for small teams: You don’t need a dedicated IT team.
• Cloud-native: Perfect for apps built on AWS, Azure, or GCP.

SaaS helps you focus on using the platform, not running it. It’s efficient, modern, and ideal for teams with limited resources or infrastructure.

Drawbacks of SaaS

• Less control: You can’t change system settings or infrastructure.
• Shared environment: Even if isolated, it’s not fully dedicated.
• Compliance limits: Not suitable for industries with strict data policies.
• Performance depends on region: Long distances from data centers can add latency.

SaaS is great for most businesses but might not work if you need total control over data and setup.

Pros and Cons of Dynatrace Managed

Benefits of Managed

• Full control: You manage everything, from OS to software updates.
• Private infrastructure: No shared resources, better isolation.
• Data sovereignty: Store and process data where you want.
• Custom integrations: Easy to plug in your own tools and systems.
• Security compliance: Easier to pass strict audits and internal policies.

For large enterprises or regulated industries, Managed offers the depth and flexibility needed to meet complex demands.

Drawbacks of Managed

• More setup: You need infrastructure and technical skills.
• Higher upfront cost: Hardware, storage, and people add to the bill.
• Manual maintenance: You handle upgrades, patches, and scaling.
• Slower to adopt updates: You control when to install new versions.

Managed works best for companies with dedicated IT staff and strong security requirements. It’s powerful, but not for the faint of heart.

How to Decide Between Managed and SaaS

Checklist for Making the Right Choice

Here’s a quick guide to help decide:

Need	Go With
Fast setup, minimal IT	SaaS
Total control over infrastructure	Managed
Strict data residency rules	Managed
Scaling without maintenance	SaaS
Private cloud or on-prem systems	Managed
Frequent updates with no hassle	SaaS
Internal compliance requirements	Managed
Cloud-first workloads	SaaS

 

Match this with your business model, team size, and future plans.

Common Business Profiles and Fit

• Tech Startups: Usually choose SaaS for speed and simplicity.
• Enterprises in Banking/Healthcare: Often prefer Managed for security and compliance.
• SaaS Providers: May choose either based on client needs and budget.
• Government or Defense Projects: Almost always go with Managed.

No option is better than the other in general—it all depends on your specific needs.

Real-World Use Cases and Examples

SaaS in a Fast-Growing Startup

Imagine a growing e-commerce startup with a small dev team and a few cloud-hosted services. They need fast insights into app performance and user experience but can’t spare resources to run their own monitoring system.

They choose Dynatrace SaaS. Setup is quick, they’re monitoring in hours, and there’s no need to hire new IT staff. As they grow, they just upgrade their plan and keep rolling.

This lets them focus on product development, not IT management.

Managed in a Regulated Industry

Now think about a healthcare provider. They store patient data, which is subject to HIPAA. Cloud storage is off-limits. They need full data control, strict access logs, and in-house encryption.

Dynatrace Managed fits perfectly. They host the system in their own data center, connect it to secure internal systems, and control everything. It requires more IT work, but they meet all legal and internal compliance standards.

Conclusion

Dynatrace SaaS and Managed are built for different needs. SaaS offers speed, ease of use, and hands-off maintenance. It’s ideal for teams that want fast results without handling infrastructure.

Managed gives you full control, tighter security, and more customization options. It’s the go-to choice for industries with compliance rules or complex IT setups.

Choosing between them isn’t about which one is better—it’s about which one fits your goals, team size, and business rules.

FAQs

Can I switch from SaaS to Managed later?

Yes, but it requires migration. You’ll need help from Dynatrace support to move your data and configurations.

Is performance better in Managed vs SaaS?

It depends. Managed can be faster if well set up, but SaaS is more consistent for most teams.

Which option offers better support?

Both get strong support, but Managed users often work more closely with Dynatrace engineers during setup.

Does Dynatrace SaaS meet compliance needs?

It meets many global standards but check your internal requirements before choosing.

Is Dynatrace Managed harder to set up?

Yes, it takes more time and resources. But it gives you more control over the system.