The On Premise vs Cloud Software Guide: Which is Better?

Because cloud technology has transformed the way we do business, many businesses have transitioned away from on premise to cloud software. If you’re looking for new business software, you’re probably comparing on premise vs. cloud software. Which type is better? That will depend on the unique needs of your business.

Read our guide to learn all about on premise vs cloud, the pros and cons of each, and which is ultimately better.

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What is On Premise Software?

On premise software is software that is locally downloaded to each computer on site. You pay a one-time fee to purchase the software licenses, which can require a large Capital Expenditure (CapEx). From there, you are in charge of maintenance and may need an IT department to keep on top of maintenance for your servers and hardware. Because on premise software is downloaded, you don’t need internet access to use the software.

Difference between On Premise and Cloud Software

When comparing on premise vs cloud, the big difference is that cloud software is hosted offsite in a data center. You don’t download the software to your server. Instead, you access it through an app or browser. As long as you have an internet connection, you can access the software virtually anywhere. Although there is not typically a large CapEx, you do pay a monthly fee based on the number of users. Because cloud software is hosted offsite, you don’t have to worry about maintaining servers and the expenses that come with it.

On Premise Pros and Cons

To really understand whether cloud vs on premise is better for your business, let’s dive into the pros and cons. On premise software has been used for years. Even though cloud is taking over in popularity, on premise is a viable solution for many companies.

Here are some of the pros of on premise software:

Lower Total Cost of Ownership (TCO): With on premise software, you may have a large CapEx initially. However, once that is paid for, that’s it. Unlike cloud software, on premise comes with no subscription fees. Over the lifetime of the software, you will end up paying less.
Security: With on premise software, you keep all data in house. No third parties have access. Healthcare facilities and other businesses where data privacy is essential may feel more comfortable choosing on premise over cloud software.
Customization: With on premise software, you have a lot more options to configure and customize the software for your needs.
Uptime: No internet connection is needed to access your on premise software, which means you can continue to work even when having an internet outage.

Although on premise software can be a great choice, it does come with some drawbacks. Here are some of the cons of on premise software:

Cost: The initial CapEx can be quite large, making on premise software out of reach for some companies. You pay for all the licenses at once, plus the hardware and infrastructure needed to set it all up. Additionally, maintaining the servers and infrastructure often requires a dedicated IT department.
Data recovery: When disaster happens, on premise software is much more susceptible to data loss. Unless back-ups happen regularly, there is no guarantee you’ll be able to recover the lost data.
Implementation time: On premise software takes much longer to implement than cloud software. That’s because on premise software has to be downloaded to each server and individual computer/laptop.
Security: You might think that on premise software is less susceptible to a security breach than cloud software. But the fact of the matter is that most of the massive data breaches of the last decade were from on premise systems. To protect your data, you need a robust security system. If that’s not in the budget, choosing cloud software may be the better option.

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Cloud Pros and Cons

There are a lot of reasons people have been switching over to cloud software. From scalability to flexibility, cloud software comes with a lot of advantages. Here are some of the pros of cloud software:

Affordability: One of the reasons cloud software is so popular is its affordability. You pay a monthly fee to access the software based on the number of users. There is no infrastructure or hardware to purchase, which in turn means no high CapEx.
Access almost anywhere: On premise software ties you to the office, but with cloud software, you can access it almost anywhere. All you need is an internet capable device and internet access.
Easy IT: With cloud software, you don’t have to worry about maintaining an IT department. The cloud service provider handles maintenance, updates, and compatibility issues.
Scalability: Business growing? All it takes is the click of the button to add more users. Conversely, it’s just as easy to scale down.
Lower energy costs: Servers take a lot of energy to power and maintain. Because everything is hosted in a data center offsite, you’ll see lower energy bills for your office.
Implementation time: With cloud software, you get access almost immediately. No waiting days for a timely installation.
Security: Data centers utilize robust security systems and protocols to protect the data they host. Typically, your data is more secure in the cloud than on premise.
Auto backups and recovery: When comparing cloud vs on premise, one of the biggest advantages is how much easier recovery can be. Most cloud service providers offer automatic backups, which means that when disaster happens, you know you’ll be able to recover your lost data.

Cloud software has a lot of advantages, but there are drawbacks as well. Here are some of the cons of cloud software:

Uptime: With cloud software, you need an internet connection. If your internet is down, so is your software.
Total cost of ownership (TCO): With cloud software, you pay a monthly fee, no matter how long you’ve used it. Over the lifetime of the software, the TCO can be higher than on premise software.
Customization: Although you can configure cloud software in some ways, you will generally have much less control to customize the software.

How to Know Which is Better for Your Business

When choosing between on premise vs cloud software, you may have conflicting feelings. Each has its pros and cons, so how do you know which is better for your business? The truth is the better option will depend on your business. Here are some considerations when choosing between cloud vs on premise:

Capital expenditure: Do you have the money to make a large CapEx for on premise software? Are regular payments better for your business than a large one-time expense?
Security: Can you afford robust security measures to protect your data? Do you have the tools to regularly backup your data?
Customization: Do you prefer the high degree of customization possible with on premise software?
Upgrade cycle: Do you want the latest upgrades to your software right away?

On Premise vs Cloud Software Conclusion

On premise software gives you more control while leaving you with the responsibility of maintenance. On the other hand, cloud software comes with less responsibility at the cost of customization. In the end, weighing the pros and cons of on premise vs cloud software will help you make the right choice for your business.

Looking for cloud solutions for your business? At OneStop Communications, we provide businesses with the latest business telecom technology. We serve the Southeast of the United States and partner with the nation’s best providers, including Nextiva, Verizon, Vonage, and more, to solve your business telecom needs. While we’re based in Atlanta, we serve all of the southeast including Miami, Orlando, Birmingham, and more!

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