Back to Insights

On-Premise Vs Cloud | Which Is Best For You?

Managed services 05/29/2020 - 13:17 by Swami Nathan

There are several considerations in today’s enterprise IT environment that a company needs to weigh to determine if a cloud platform is the right choice. Conversely, many businesses are reluctant to make the transition into the cloud, relying instead on their tried and tested legacy and on-premise applications and technologies to do business.

On-Premise vs Cloud

It’s no wonder that cloud computing has grown in popularity as much as it has, as its attraction and promise to deliver a greater versatility for businesses from time to time, and money savings to mobility and scalability improvements. On the other hand, on-premise software – built on a company’s servers and behind its firewall – has long been the only option for companies and can continue to meet your business needs sufficiently (think, “if it’s not broken then don’t fix it”). In addition, on-premise applications are reliable, and secure, and allow enterprises to maintain a level of control that is often not possible for the cloud. Yet, there is an agreement among IT decision-makers, that they will need to incorporate modern cloud and SaaS technologies as an add-on to their on-premise and existing systems to achieve their business goals.

On-premise data centers, commonly referred to as “on-prem”, allow you to have full control of your infrastructure, while cloud computing is cost-efficient and easy to scale up and down.

Business needs



Datacentre single tenancy (for compliance)


Highly secure data encryption

Customizable hardware, purpose-built systems


Capacity easy to scale up and down


Infrastructure requires large, regular investments


Pay-as-you-go, usage-based pricing


Lower Total Cost of Ownership in long-term


Complete data visibility and control


Built-in, automated data backups and recovery


Near-zero downtime risk



If it is not broken, don’t you fix it? For decades, many users and businesses have been using software on their systems and have never had any problems with it. You buy a device, install it on your home computer or office Desktop, and can work with it for many years. The advantage here is that you own the software: You can use the software without any restrictions once you have purchased the device. There’s just one risk at a time. But is this the case? The programs cannot be used for an infinite number of workstations, particularly in the corporate environment where you have to deal with different licenses. Every employee may need to buy a separate license – or you can purchase several licenses in one bundle. Therefore, the On-Premise solution isn’t that simple.

Good software is constantly being updated: updates extend the program’s functions, enhance its stability, and address weaknesses. The users need to install these updates periodically, which is an extra task for them. Especially in larger companies it can be a considerable effort to install updates and bug fixes. Furthermore, the support does not last forever. Many software vendors at a certain point avoid updating the old program in favor of a new version. You then have two options: either you are continuing to work with an older version, or you are investing in the latest one.

Another benefit, however, should not be overlooked: All data stays with the customer. Although cloud systems allow information to be transferred to a remote server in a data center, you can carry all data with you in on-promise software unless you choose to use cloud storage. In comparison, as a customer of On-promise solutions, you have full leverage. You can know how to manage the program yourself.

Advantages of Premise

  1. On-premise maintains perpetual licenses.
  2. Greater control over the protection of data.
  3. Greater customization capability.
  4. The organization's implementation process is more regulated.
  5. Greater visibility of updates.
  6. More versatility in the integration of other systems.
  7. Response to data is usually much faster than in a web application.

Disadvantages of Premise

  1. Requires license licenses to the database.
  2. Needs an internal IT team or an outsourced subscription to support.
  3. Should have your hardware.
  4. Recurring maintenance payments and updates.
  5. Database security is the organization's responsibility.
  6. Customization will delay the time of implementation.
  7. Customization will make updates to vendor software complicated.
  8. More difficult and expensive to execute.
  9. an organization must restore and back up data.


Users now have other ways of accessing software with Cloud Computing and SaaS – instead of purchasing the corresponding application, downloading it on your PC, and then using it, you decide on a subscription. A provider hosts and offers users access to the software in a data center. Your PC or laptop just communicates in the browser, so the real processing power is in the data center. Therefore, your hardware only needs to provide internet access.

Not only is the hardware maintained by professional personnel, but the software is up-to-date as well. Updates are installed without any additional effort needed by the user and are immediately accessible. Since the software is independent of the Computer, you can access the program from anywhere – you are not limited to either the system or the location. Nothing functions without internet connectivity which is a big drawback of cloud computing. This can be especially critical for professional users and businesses: this is unacceptable if the work suffers due to a poor internet connection.

Professional software can be costly. While On-Premise solutions are generally paid with a one-off payment, smaller businesses and entrepreneurs are not often willing to make such a large investment. Additionally, the program you buy may not fit your needs after a while, as the business and its requirements grow. Users can opt between a monthly or an annual charge for most SaaS providers, allowing them to move to a new product at fairly short notice. Additional functions or additional access for employees can normally be booked easily and cheaply.

Selecting cloud software means trusting the provider and giving them control. Trust is so important, at times very sensitive and business-related data are stored in the data centers of the provider. If data protection is not taken seriously by the cloud software manufacturer, then the consequences could be catastrophic. It is also potentially risky to turn over control: if the provider wants to discontinue the service or even pause maintenance work, this failure may have adverse effects on the users.

Advantages of Cloud

  1. Greater access to the software.
  2. Can be taken as operating expenses.
  3. Predictable costs over time, no more investments in hardware.
  4. Scalable with a rising user count.
  5. Less initial investment.
  6. Streamlined disaster recovery and backup.

Disadvantages of Cloud

  1. Minimum commitment requirements.
  2. No control over editions or updates.
  3. Little or no customization capability.
  4. Less integration control.
  5. Reliant on stable internet access and large available bandwidth.
  6. Shorter delivery times are largely at the cost of customization.

So, is Cloud better than On-Premise?

Although it is obvious that the Cloud provides a variety of advantages, each company has different goals and is different. We, at Teceze, believe in providing the right solution for your business and can offer a range of managed services including cloud solutions from our own data centers, on-premise solutions, or a mix of both.

The only way to protect what you’ve worked hard to build is to be vigilant when it comes to cybersecurity. If you’d like to know more about how your business can benefit from managed services, just give us a call, we are here to help.

Cloud-based software is hosted on the vendor's servers. On-premise software is installed locally, on a company's own computers and servers.