04 October, 2021

6 Key Differences Between Cloud & On-Premise Systems : Which One Is Better for You?

By: Ola Azzouqa & Lotfi Al-Sarori

Cloud & On-Premise Systems
The world is continuously changing with new technology. Many companies are carefully taking their first steps into a new world that is constantly adapting to new circumstances. It has been common to use on-premise systems to manage business operations. Nevertheless, new technologies like the Cloud have emerged to transform how companies operate.

Deciding on the technology that’s best suited to manage your business, products, and data can be rather tricky. However, one good place to start would be a comparison between on-premise and Cloud systems. This may give you a clearer idea of what works better for your business based on your requirements and needs.

What is an on-premise system?

An on-premise system is a software that’s located on-site. It means that your servers and computer hardware are hosted in your organization’s infrastructure and are physically “on-premise”.

The control, administration, and maintenance of the servers are the responsibility of your in-house IT staff. In some cases, however, a company might designate an IT partner to do the job. Data and other information are shared among computers within your local network, and the systems are fully under your staff control.

Cloud systems

Cloud-based information systems are hosted off-site by a Cloud system provider. This means that a service provider hosts your data within their hardware and infrastructure. The Cloud provider secures and installs all the necessary hardware, software, and other supporting infrastructure in their data centres.

You can normally access the provided Cloud systems and services to manage your account remotely via the Internet using a web browser. Cloud business systems are typically scalable and dynamic and designed to accommodate the needs of a wide range of companies in a certain industry or several industries.

On-Premise VS. Cloud

There are different types of Cloud services and deployments, but in this article, we will compare on-premise systems to SaaS (Software as a Service) Cloud-based systems. SaaS systems are subscription-based software systems hosted in the Cloud. For more information on the different types of Cloud-based services and deployments, please refer to our article: So, what are all these Cloud acronyms, IaaS, PaaS, SaaS, XaaS? and what is a private Cloud?.

In the following section, we will compare 6 key aspects of On-premise vs Cloud SaaS systems to illustrate how they function and differ from one another. The comparison should provide you with important insights on which type of system would be right for your business.


Deployment is one area where on-premise and Cloud systems vary significantly. This refers to how a business system is implemented so that it can be used for daily business operations.

The implementation of on-premise solutions is handled in-house. This means you have to depend on your internal resources alongside the system providers’ resources in a joint project to get the system up and running. The process normally involves customizing and configuring the proposed system based on your business needs and requirements. The process also entails an understanding of the required infrastructure, the impact on the LAN/WAN bandwidth, and what additional hardware and software resources are needed.

With SaaS, you don’t have much to do or worry about in regards to deployment work. You can be up and running in minutes. Your provider will be responsible for most of the deployment and implementation processes. Cloud systems are typically easily configured and come with a wide range of features suitable for the vast majority of targeted customers. However, since Cloud systems are deployed for the masses, you would not have as much freedom to get the system provider to do system customization specifically for your company’s needs.

Both deployments would include staff training on using the system as well as data migration from your old system, if any, to the new system.


The physical nature of on-premise systems implies that users usually have to be on-site (on-premise) to use the system. While remote access is possible for on-premise systems, it is the exception, not the rule. It requires involved setup for accessibility and security since this means access to the company’s internal network and resources. Moreover, accessibility times may be restricted by system administrators for monitoring and security purposes. Cloud systems, on the other hand, are built from the ground up to be accessible from anywhere at any time.

However, in a Cloud environment, if the unexpected happens and there is a downtime, you may not be able to access your data until the system goes back online. Moreover, if your Internet connection goes down, you are totally offline and cannot do much with your system or access your data. This is not naturally the case in on-premise deployments, however. Having your system hosted in-house gives you the ability to get access to your data locally without having to have an Internet connection.
Difference between On-Premise and Cloud Systems

6 Key Difference between On-Premise and Cloud Systems


Using on-premise software provides you with more control over your systems since they are installed on your own hardware. This allows you to configure it as per your own specific business needs. While Cloud providers may allow you to configure your own hardware and system settings, it is typically limited especially in SaaS deployments as the environment is normally shared with other businesses.


Maintenance and system management gives SaaS a big advantage over on-premise systems. With SaaS, you don’t have to worry about hardware optimization, failures, or maintenance. Moreover, network management, security, and connectivity are the responsibility of the SaaS provider. Additionally, software updates, uptime, and support issues are all handled by the SaaS provider.


With on-premise, your security is totally your responsibility. This means you need to monitor and conduct security audits and procedures constantly. An on-premise system requires physical, network, and data security measures. However, Cloud providers deploy state-of-the-art encryption and security methods to provide a safeguarded storage for all data and documents. The Cloud security is highly automated and controlled. This reduces risk as well as the work performed by your IT staff.


Using an on-premise software is comparatively expensive. It involves procuring servers and other computer hardware, operating systems, and other tools. Moreover, there are the expenses of maintaining and upgrading the IT infrastructure making sure it is always up and running securely and optimally. In addition, you need to pay for the IT staff and the resources responsible for maintaining and updating the systems and hardware.

This means that on-premise system deployments require a sizable upfront investment, capital expenditure (CAPEX), to purchase hardware, construct infrastructure, and procure needed software and tools. This is besides the additional operational expenditure (OPEX) for things like maintenance costs and IT staff salaries.

Cloud information systems are predictably more cost-effective in general. You only have to pay for the services you use and forget about other associated expenses such as maintenance and upgrades. Additionally, SaaS systems are subscription-based, so you don’t have to worry about large upfront investments (CAPEX). Moreover, the SaaS model allows you to pay as you go/grow and scale up/down according to your needs.


In short, there are several fundamental differences between on-premises and Cloud systems. On-premise deployments are high in cost and involved in maintenance but give you more control of your system and data. However, they may take months or even years.

On the other hand, you can access Cloud systems from anywhere at any time. They are cost-effective and can be up and running in days and sometimes even hours. However, you have less control over your system environment, and they are totally dependent on having a reliable Internet connection.

Which one is the best one for your business depends entirely on your needs and what you are looking for in the system.

Check out what ESKADENIA Software has to offer whether on-premise on in the Cloud.

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About ESKADENIA Software

ESKADENIA® Software is a three-time MENA Award Winner & CMMI® level 3 certified company that is active in the design, development and deployment of a range of software products in the Telecom, Insurance, Enterprise, Education, Healthcare, and Internet application areas. The company is based in Jordan and has sales activities in Europe, the Middle East and Africa; more than 85% of its sales are exported to the global market. For more information, visit, or contact us at