On-Premise vs. Cloud Software: Pros & Cons

On-Premise vs. Cloud Software: Pros & Cons

In this article, we cover some fundamentals of on-premise vs cloud. Within a decade, cloud computing managed to take over the IT department of many organizations and businesses. With its off-hands, scalable, and easily-accessible approach, the mass-scale adoption of this new-fangled mighty server seemed like a no-brainer.

But a debate rages on in both the privacy of board rooms and on online forums alike. Did cloud computing deserve to usurp the “ole’ reliable” on-premise servers? Do the cons of one outweigh the pros of another? In reality, every organization needs to decide which is the right fit for them. We explore these questions and more in this article about on-premise vs cloud.

On-Premise vs. Cloud Software

What is on-premise computing?

On-premise computing means that an enterprise’s resources/applications are deployed in-house and maintained within their hardware and servers. This close-to-home approach requires that the enterprise purchase its licensed software to be kept within the organization premises.

What is cloud computing?

Concerning cloud options, a third-party vendor hosts all of the organization’s computing, storage, database, monitoring, security, networking, analytics, and other related operations. These applications and features can be accessed and amended through a web browser.

On-premise Vs Cloud computing

Cloud computing is renowned for its flexibility, broad accessibility, and scalability, while on-premise servers win favor with their traditional reliability and robustness.

While many organizations still opt for the traditional on-premise form, cloud computing has witnessed staggering growth. Forrester Inc. reports that Global expenditure on Cloud services has exponentially increased from $17 billion in 2009 to $208 billion in 2019, with this upturn showing no plateauing signs.

However, for an enterprise to decide which is their best fit, they must first assess what they require in terms of performance, cost, security, compliance, back-ups, storage, and accessibility. Furthermore, it must decide whether they have the resources to maintain either data-hosting service properly.

The pros and cons of on-premise vs cloud?

As a result of being two sides of the same coin, on-premise and cloud are often pitted against each other, scrutinized, and relentlessly compared. To accurately evaluate the merits and pitfalls of on-premise vs cloud, it’s worth an overall review:

The pros and cons of both

Cost of On-premise vs Cloud


Due to the utility pricing model of the cloud, organizations only pay for what they use. This fee can be based on the rate flow of data ingress/egress or paid in one upfront lump-sum annually. This payment method is favorable for large-scale organizations that otherwise would need to invest in hefty hardware, licenses, software, and trained human resources to oversee its proper use.


On-premise servers can prove costly not only due to regular maintenance fees but also due to power consumption. Multiple servers can rack up hefty electricity bills, whereas a cloud server expends essentially no additional electricity other than the device it’s run on and is on the cloud provider to pay for consumption.

Maintenance/ technical involvement


An often-overlooked upside to using a cloud server is that it can provide a full back-up solution of not only your data but your entire server operating system and applications. This complete back-up solution means that business-as-usual does not have to come to a standstill if a technical error occurs.


The responsibility of the upkeep of hardware, software, and their on-premise data service features lies solely upon the enterprise. If an IT failure occurs, the enterprise must deploy the right resources to repair and recover any lost data. Maintenance and repairs can be lengthy/costly, meaning that businesses have less time and money to invest in other endeavors.

Scalability of On-Premise vs Cloud


Cloud options allow for considerable “wiggle” room for businesses to scale up or down depending on overall usage, user requirements, and company growth. This freedom gives organizations almost instant full-control to make business trajectory changes or adapt to real-time developments.


Regarding on-premise, essentially, an organization is limited to the capacity of their servers. For enterprises looking to broaden their horizons, in-house data servers could prove to be a limiting factor.

Security of On-Premise vs Cloud


Upon its debut, an organization trusting a cloud server with its data was thought to be a risky move. Considering the sensitive data of clients such as log-in credentials, addresses, financial info – many businesses could not reconcile their duty to protect customer data while relinquishing it to a third-party host. The risk of potential breaches is too high for some enterprises.

However, over time, great strides have been made in cloud computing security to introduce several protective features. IAM settings, encryption options, region configurations, and other data protection tools are usually available in modern clouds.

Despite security improvements, all clouds are breachable to a certain extent. Many highly publicized data infringements have occurred in the last decade during which confidential data has been viewed, stolen, and even shared online.


For many industries, data security is a top priority. Consider banking or governmental sectors that regularly deal with sensitive information. Though these industries stand to profit from cloud options, on-premise servers’ reliability and autonomy make more sense.

On-premise server security is maintained and overseen locally, with its entire stored data, and functions are only accessible by specified people – usually a highly-trained and trusted IT team.

Highly-restricted industries will value the security of being able to contain all their data within organization premises. Naturally, this doesn’t limit internal risks; however, it can also limit external threats.


Control of On-premise vs Cloud


An invaluable benefit of using cloud servers for modern organizations is that they can be accessed from anywhere at any time, given that WIFI is available. Though there are several cloud computing forms to choose from (such as public cloud, private cloud, and a hybrid cloud), a public cloud is virtually accessible 24/7. This flexible feature also allows employees the freedom to work from home without having to sacrifice access to company data.

However, in a cloud-computing environment, Data and encryption keys are the property of a third-party provider. So, on the off chance that there is some downtime, organizations may not be able to access their data.


With no third-party vendor or data host involved, enterprises are entirely in control of their data and what happens to it. This control is the lead cause of hesitation from large-scale, tightly regulated industries to convert to the cloud.

Conclusion of On-Premise vs Cloud

In short, one is not better than the other, more optimized according to varying industry needs. As is apparent, for industries that require considerable flexibility with standard security procedures, cloud computing is the obvious choice. Conversely, on-premise servers are more suited to tightly regulated banking or government sectors as it allows them to supervise their data activity. Despite there being no clear winner, it appears that cloud computing is more suited to the workflow and business model of most modern organizations.

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