What are on-premise and cloud-hosted systems?
One of the biggest decisions you will make when selecting new software for your organization is whether it will be installed on-premise or cloud-hosted.
Factor |
On-Premise |
Cloud-hosted |
| Initial cost | Your organization will pay licensing fees to own the software. Payment is upfront, so you can expect a fixed price. | Your organization will pay licensing fees to use the software. Depending on the CSP, payment terms can be pay-for-usage, pay-per-month, pay-per-user, etc. Subscription fees can increase over time. |
| IT infrastructure | Your organization will have to provide its own servers, hosting, backup, internal network connection, Internet connection, and other hardware and software as needed. | Your organization will need to invest in a high-speed Internet connection to maximize the cloud functions. |
| Customization | Customization is in-depth per the needs of your organization. | Customization is limited and dictated by the CSP. |
| Control | Your organization will have control over its data and the whole system. | Your organization will hand over control to the CSP. This includes giving the CSP access to your organization’s data. |
| Implementation | You will have to wait for the IT staff to complete the integration, with a wait time that is dependent upon the complexity of the IT infrastructure. | Implementation time is typically brief because the CSP will handle everything. |
| IT support | Your organization will have to create a team of dedicated IT staff to address maintenance and support issues. | Your CSP will handle a majority of the IT support as a part of their service package. |
| Security | Because data is stored on site with internal-only access, fewer security risks are involved. Your organization can restrict access to suit its needs. | Internet-accessible data has greater inherent risks. Your organization must choose a CSP that offers reliable security. |
