Cloud Vs. On-Premise: Which Is Better For your Business?

5 December 2016 5 MIN READ

Cloud or On-Premise? The decision depends on your requirements. Latest trends show that the cloud is in demand these days, with more and more companies replacing On-Premise services with cloud computing. Solutions for CRM, ERP, and more are now available through the cloud, though some companies still favor On-Premise software and storage. The decision to choose either On-Premise or Cloud depends on your business needs.

Following key considerations may affect your decision to select On-Premise or the Cloud.


It is very important to protect sensitive information that companies cannot afford to be leaked out of their premises. In cloud computing, documents and files can be accessed from anywhere through the cloud, and many businesses assume that there are increased opportunities for anyone to access information. Fortunately, cloud security can be increased if there is proper authentication and administrative privileges. If you have selected well-supported cloud solution, then you can get access to 27*7 support, so if security is compromised, the provider’s support team will take immediate action as compare to the traditional IT in an On-Premise situation.

In case of On-Premise, the servers are installed within the premises, which lead to more secured zone for confidential information. Companies can have custom levels of security at different network levels which is not feasible with cloud based system. Having a dedicated team to trust in-house may be preferable to outsourcing security as compare to the third-party vendors. Frequent updates of On-Premise firmware and hardware will protect you against attacks.


Maintenance includes installation and support cost. The initial installation cost of cloud solution is low. There is no hardware or equipment that is required to be built or installed. Also, cloud solutions do not require dedicated in-house IT department because support is usually taken care of by the vendor. The cloud solutions require recurring fees (like monthly or yearly) to subscribe to the vendor’s services. Cloud solution totally depends on the concept of the more you pay the more you get.

On-premise solutions requires investment in hardware and significant physical storage space. In most of the cases, systems are not usually need to be replaced for several years. It requires one-time investment, which is preferable for some than paying for services on time-basis. The installation can be complicated and time-consuming, which require you to hire external contractors. There are some additional costs involved, like support from IT department, electricity bill if systems need to kept running around the clock.


Ultimately it boils down to balancing between cost of operations and data security. The other factors to be taken into consideration can be access and customization. The choice between the two solutions is a big decision that can affect your organization.

About the author

Nidhi Batra

Nidhi Batra is a brand communication specialist at Uneecops. She is an active contributor to SAP Business One community and loves to write on smart and intelligent technology which is redefining business models such as SAP Business One, SAP Cloud, Tableau and Power BI. Having Master’s in English from Delhi University, she follows Gartner and spends her time reading avidly about Artificial Intelligence, SAP HANA, Cloud, DevOps, IoT, robotics and business automation.. Tweets at @nidhi_niya

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