On-prem vs Cloud: Which one should I choose

On-prem vs Cloud: Which one should I choose


IT innovation has kept businesses running for new technologies to stay ahead the competition. With Cloud being the buzzword of the technology era, IT business leaders ponder on whether they need to move their workloads to cloud or stay back on their existing systems. While moving to cloud has its own share of advantages, businesses that are hosting onto On-premises have their own reasons to stay. The right type of hosting for your businesses is dependent on a number key considerations, risks involved and long-term IT reliability and it’s important to assess them ahead.

On-Prem Vs Cloud: Comparison

Let’s move to a quick comparison in aspects of Cost, security, customization and implementation.  

Cost/ Pricing

On- Premises is generally priced under one-time perceptual licensing. This depends on the number of users, the size of the organization and the number of concurrent users. On-premises servers involve substantial upfront investment in procuring hardware, hiring staff to maintaining it and buying software licenses. It also involves expenditures for electricity, cooling systems and as the hardware reaches the end of its lifecycle, there’s also repair and replacement costs adding to it. On-Premises systems are thus considered as having one large investment upfront (Capex).

Cloud has a low-cost of entry and is priced under monthly or annual subscription, with additional recurring fees for support, training and updates. It has no additional hardware investments and it’s considered as Opex (operational costs), overhead costs that organizations will continue to pay. But it’s much predictable and can be controlled with the right optimization strategies.

Because of cloud’s low cost of entry compared to the hefty-perceptual license fees, businesses are adopting to cloud in majority. A recent study revealed that 93 percent of enterprises currently use cloud-based software or system architecture, and use of hybrid cloud systems increased from 19 percent to 57 percent in one year.


The security of business data is a critical consideration in the decision of On-Prem vs Cloud.

On-premise ERPs put more control in the hands of the organization, up to and including the security of its data. Organizations are responsible for setting appropriate user-access policies, firewalls, antivirus software, security patches installation and guarding against cyber-attacks. Most business owners feel safe on this consideration, but it‘s also important that the organization is adept at practicing the data security protocols. Businesses with appropriate IT support could handle this well, but if mismanaged- On-prem servers can leave an organization vulnerable to security threats. 

Cloud, on the other hand, is about putting the control in the hands of the cloud vendor. Cloud has a history of less-robust systems, but as cloud computing has flourished over time, so has its technology. Now, most businesses trust cloud for their security. Reputable cloud vendors have strict standards in place to keep data safe. While selecting a cloud vendor, it’s quite important that you select one with good security protocols, robust security teams and tight procedures. The recent times is also seeing prospective buyers seeking a third-party security audit of a vendor they’re considering.


 On-Premises bag an extra point in terms of customization. Since On-prem has greater control over their infrastructure, they are much easier to modify. For large organizations with complex IT requirements, the customization allowed by On-Prem can make a critical difference. However, the customizations can delay the implementations and cause issues with vendor updates software if not backed up with a strong team.

In the case of cloud, the control lies in the hands of the cloud vendor and so there’s lesser customization opportunity as compared to On-prem. Though cloud platform is not as much customizable as that of On-Prem systems- they have a highly flexible platform for businesses to develop and innovate further.

Conclusion and next steps

When it comes to choosing Cloud Vs. On-Prem, the arguments are endless. Cloud has are less costly, has lesser customizability, but offers greater scope of innovation. On-premises offers greater customization and control, but have an expensive upfront as well don’t support mobile.

To choose the right deployment model for your business, you’ll still need to weigh in a few considerations and it depends on the specific needs of your organization. Give our advisors a call at 972 267 8357 to determine your needs and we’ll help you choose your long-term success platform.  

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