The decision of on premise vs cloud hosted software remains a debate for some companies. In 2015, 72% of businesses used cloud software, which at least explains why it seems like every other TechCrunch article has something to do with the cloud.
Yet, despite its popularity, many still with the choice to free themselves (and their space) from clunky hardware.
We’ll spend the rest of the article diving into specific differences between the two. By the end, you should have enough information to decide between moving to the cloud or staying on-premise.
Difference Between Cloud and On-Premise Software
The main difference between on-premise and cloud software is where it resides.
- Cloud software is hosted on the vendor’s server and you access it online.
- On-premise software is installed on your computer.
Other than this primary difference, a real evaluation will highlight other factors as well. This is what we’ll focus on for the remainder of the post. We’ll look at a variety of things, including software ownership, ownership costs, updates of software and some additional services like implementation and support.
1. Cloud Hosted Software
People run massive companies on the back of cloud hosted software. It’s an extremely agile way to manage day-to-day operations, but it’s not for every business.
PROS - - -
Accessibility. You can access it via any modern web browser, from anywhere in the world.
Affordable. No upfront costs. You only need to spend your money on operating expenses.
Low and predictable costs. Daily back-ups, support, software licenses and upgrades. Plus, you’ll spend less on utilities because you aren’t powering on-premise servers.
Security. This is safer than your computer. If security is your #1, strongly consider on-premise.
Great service provider. You don’t need to spend your time thinking about software compatibility and upgrades. Cloud service provider is taking care of that.
Scalability. Only for what you use. Scale up or down as needed.
CONS - - -
Connectivity. You need a high-speed internet connection or you won’t get anything done.
Long-term costs. Yes, there aren’t upfront costs. However, cloud becomes more expensive as you invest years and year into the software.
Those hesitant to move from on-premise to cloud often have security concerns. The trust is, only a minority have anything to truly think about. However, there are plenty of other selling points to on-premise software as well.
PROS - - -
Lower costs of ownership. All you need to pay for is the one-time license fee.
Complete control. It’s all up to you -- configuration, upgrades, and the system changes… You have complete control over the platform.
Uptime. You don’t have to worry about Internet access affecting the software.
CONS - - -
Bigger upfront investments. This software has high upfront costs. You’ll need to spend more money before you even start using it.
Responsibility for maintenance. Having complete control means it’s all on you. You’re responsible for data backups, storage, and disaster recovery, and also for maintaining server software and hardware.
Longer implementation times. Getting started with the cloud is quite simple. But it’s more complex when creating an on-premise solution because you have to manually install it on every device and server.