On-premises vs Cloud-based Solution: Pros, Cons and The Future

Every company searching for one software platform would have heard about On-premises and Cloud-based Solution. However, choosing the right software platform for your business is not as easy as it may seem. If you are wondering about the same thing, then this article is written for you. Keep reading and opt for one of the software types: On-premises or Cloud-based Solution.

1. Introduction

On-premises and Cloud-based Solution
On-premises and Cloud-based Solution

Have you wondered what exactly are On-premises and Cloud-based Solution? Why have they been used by many companies recently? Let’s look into the definition of this software first!

  • On-premises software is a kind of software delivery model that is installed & operated from an in-house server & computing infrastructure of customers. More importantly, this platform can utilize an organization’s native computing resources but it requires only a licensed/purchased copy of the software from an independent software vendor.
  • Cloud-based Solution, sometimes being referred to as Software as a Service (SaaS), is a software distribution model which belongs to third-party providers. They host the applications and make them available to customers on the Internet. SaaS is regarded as one of three main categories of cloud computing, along with infrastructure as a service (IaaS) and platform as a service (PaaS).

2. On-premises and Cloud-based Solution: Which one is the right software platform for your business?

a. On-premises

First, let’s check out On-premises advantages and disadvantages with companies to see whether this software platform worths trying or not.

On-premises Solution
On-premises Solution

Advantages of On-premises
  • Full control: This is considered as one of the biggest advantages for companies and also is the main reason why On-premises software is quite often the only option for large companies and governments. In the modern time when user privacy is being exploited and misused, businesses start to seek a software which can protect their data and information and increase the company's reputation.
  • Higher security: Much as some SaaS providers comply with strict security, data ownership, and user privacy regulations, the control & flexibility offered by on-premises software assist companies and governments in implementing a variety of security measures to protect their services from attacks in the further future.
  • Software customization: Thanks to the software’s license and proprietary rights, On-premises software allows enterprises to customize, tweak & configure certain data within the software to tailor it to their business needs and requirements.
Disadvantages of On-premises
  • Agility and Scalability: You need a well-done plan in advance for any changes because of the long time required to research, justify, order, and deploy the hardware.
  • IT Support: With On-premises, companies rarely receive IT support, especially when applications are tailored to meet their unique requirements.
  • Upgrade cost: On-premises require high upfront cost to upgrade hardware and that means any mistake can be hugely expensive.
b. Cloud-based Solution

On the other hand, SaaS is regarded as the most competitive software platform in comparison with On-premises because of its outstanding features. Let’s take a deeper look into the SaaS platform’s advantages and disadvantages to make the most objective decision.

Cloud-based Solution
Cloud-based Solution

Advantages of Cloud-based Solution
  • Decrements in software piracy: The greatest benefit of SaaS is that it will decrease or even stop illegal distribution of software which does not only increases the profit of the sellers but also increases the profit for real users. For instance, if you are using the licensed software within your company but your competitors are using pirated software, that means they can sell their services at a lower price than you. With SaaS, everyone has to use the licensed software because they can’t download pirated versions from external sources.
  • Lower operating costs: In many cases, the cost of a subscription may take up a large amount of the overall SaaS cost. Meanwhile, other costs involving upgrades will be covered by the company providing the SaaS application. Thanks to SaaS, companies can save a lot on human resources to serve the application and overall operating expenses.
  • Little or no technical knowledge is required: IT companies provide SaaS on their own computers and servers for their end-users. It means it is not necessary to own a server to keep and manage data because everything will be installed on the third party's server which will save time, reduce total cost and bring flexibility for users. Moreover, there are other advantages of SaaS thanks to cloud computing such as data storage, personalized computing, sharing, collaboration, and on-demand scaling.
  • Scalability: The need for scaling the application is quite common. The most outstanding advantage offered by SaaS is that scaling the application is again handled by the SaaS providers. Thanks to that, the business owners would only need to upgrade to the next plan tier while the server and feature upgrade is organized by the SaaS providers.
Disadvantages of Cloud-based Solution
  • Lack of control: In-house software application offers a higher degree of control than hosted solutions like SaaS where control depends on a third party. Moreover, everyone has to use the latest version of the software application and cannot defer upgrades or changes in the features.
  • Limited range of applications: Unfortunately, while SaaS is becoming more popular, there are still many applications that don't offer a hosted platform.
  • Connectivity requirement: The SaaS model is built on web delivery so that you need to make sure the internet is consistent. If connectivity fails, you will lose access to your software or data.

3. Future forecast: Which type will win the game?

Cloud-based Solution is likely to win the game
Cloud-based Solution is likely to win the game

The software industry has witnessed so many changes in recent years that make future forecasts become harder than ever. However, Cloud-based Solution is booming and proving its position in the internet age. Here are the reasons why:

  • Cloud-based Solution is evaluated to have more advantages in sales, operations, manufacturing applications and cloud applications making it outweigh other software. According to software experts, in the near future, the development of SaaS will largely depend on buyer and consumer choice. Businesses are taking note of buyers' behavior and switching to subscription-based business models.
  • Another proven success of Cloud-based Solution is that this software has a 10,3% increase in profit each year (according to drip.com) and this number will continue to grow. SaaS’s report also points out that this software platform has been widely used by 64% of small and mid-size businesses.
  • Nowadays, Cloud-based Solution has gradually become the new trend that is trusted by thousands of companies around the world. As a result, it is highly recommended that companies find prestigious software vendors which uses the most advanced technology.

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