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On Prem vs Cloud Solutions: What You Need to Know to Make the Best Decision

Cloud computing has been massively successful in the last decade and many companies have opted for the relatively inexpensive, low maintenance offerings of cloud software vendors over having software installed on-premises.

Although the migration from on-prem to cloud solutions is in full swing, there are still key differences in cost, security, and implementation that you should be aware of before deciding which delivery solution works best for your company.

Difference between Cloud and On-Prem

Before getting into the nitty gritty details of the benefits of one solution over the other, let’s discuss what the key differences are between on-prem software solutions and those on the cloud.

The key difference between cloud and on-premises software solutions is in the way they are deployed and maintained.

On-premises, as its name infers, is on the premises of an organization and is directly controlled and maintained by that organization’s IT and infrastructure. With an on-prem solution, your organization is responsible for maintaining the solution and all of its related processes.

Contrast this with a cloud solution, where the software is hosted by the software provider, but your organization can access those resources and use them at any given time.

If you’ve ever used a service like Gmail then you have a clear example of how this works. You can access Gmail from your phone or computer anytime, from anywhere, but Gmail is maintained on Google’s servers, and thus you have no control over its delivery and maintenance.


With the differences in deployment established, we can do a cost/benefit analysis of both options and decide which one is best for you.

Cost, and the way you pay for each option, is considerably different between on-prem and cloud based solutions


Generally, on-premises solutions will require a single, large investment, a one-time perpetual license fee (often based on your organization’s size or number of users). After the one-time fee, there are often recurring fees for support, training, and updates.


Cloud is often a recurring fee that you pay monthly or annually. However,  enterprises that elect to use a cloud computing model only need to pay for the resources that they use, with none of the maintenance and upkeep costs. The price adjusts up or down depending on users and usage.


Although neither cloud nor on-prem solutions are inherently insecure, there is a difference in the security level and control you can exert over the security.

Consider this the difference between keeping your money in a vault in your home compared to in a bank. Both are secure options, but in your own home you have more control over security and the comfort of knowing exactly where your money is at all times.

On Prem:

An on-premises solution puts the security of your organization’s data in your own hands. For some organizations who need to keep their data private, like banks and government contractors, this may be a preferred option, even with the higher price tag of an on-prem solution. The drawback is that not all organizations are aware of best practices when it comes to data security. Keeping your solution on-prem puts liability on your organization. Make sure you’re prepared for this responsibility.


A cloud solution puts the onus of your data’s security in the hands of the vendor. This is often a perfectly acceptable solution. In order to maintain their reputations, vendors are usually hyper aware of data security. Protecting client data and maintaining trust is essential for vendors to remain in business. However,  in the past decade there have been more than a few data breaches that have affected millions of people. Cloud solutions are a much more affordable option, but make sure the vendor you choose takes appropriate steps to secure your organization’s data.


Deciding between an on-prem and cloud based solution for your organization requires careful consideration of your timeline and need for the solution. If you’re on the fence between the two options, and cost and security haven’t pushed you to one side or the other, your timeline for implementation could be the deciding factor.


An on-prem solution requires a drastically longer implementation time. Although this can vary depending on your organization’s existing infrastructure and the requirements of the solution you’re installing, on-prem software generally requires the installation of hardware and software. The hardware requires a physical space on the premises of your organization, and the hardware components often require specific environments to perform at maximum capacity. That being said, if your timeline for implementation is fixed and short, an on-prem solution may not be the best option for your organization.


A cloud solution can be implemented in minutes or just a few days after the contract is signed. This is one of the huge advantages cloud solutions have compared to on-prem. Each vendor will have their own processes around implementation, which could extend the timeline to a few weeks or months. If you’re on a short timeline, you’ll want to understand your vendor’s processes before deciding to go with their solution. Even with the differences in vendor implementation, a cloud solution is going to be an easier solution to implement compared to an on-premises solution.


When considering if you’re organization needs an on-premises solution or a cloud based one, the most important factors will most likely be cost and security. If your industry requires the added level of control that comes with an on-premises solution, then cost and implementation will be two contingencies that you have to live with.

Of course, an on-premises solution doesn’t guarantee added security. The only guarantee is that you have more control over security, but this puts the responsibility in your hands. It is best to make sure that you have strong security protocols and processes in place if you’re going the on-prem route.

You give up a degree of control with cloud based solutions, but most vendors take extreme care to manage and protect their clients’ data. With a cloud solution, you’re looking at a lower cost and shorter implementation timeline. If you need a solution now, or very soon, a cloud based solution is a great option.

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