Debating Cloud Services Versus On-Premise Solutions

The difference between hosted versus on-premise software is analogous to renting a flat versus owning it, and both the benefits and disadvantages follow accordingly.

Cloud services are similar but not directly equivalent to Saas (software as service), this is when software is provided externally by a third party which houses the IT infrastructure. Access is on-demand, but unlike the popular SaaS, hosted software does not support the synchronicity of multiple customers on a single application, meaning that separate installations and servers are required for each user.

Hosted software is like renting the hypothetical flat – it means generally lower costs and lower risks. Compared to an outright purchase, the initial payments are less, investment (in software or hardware) is less likely, licensing and renewal are reduced. There’s no maintenance, backup worries, reduced responsibility, and the seductive notion of a dependable monthly cost.

But like renting a flat, there can be unanticipated expenses – once-off payments here arriving in the form of customization, training or supplementary functionality. The landlord’s also got the spare keys, so there are potential security concerns – and the rules (regarding the timing of upgrades for example) and fee enlargement decisions are not the customers to make. Cloud services also provoke worries of vendor reliability and problematizes the vendor’s system becoming redundant, financially or otherwise.

On-premise software is basically traditional software management – software installed and run on the customer’s own computer. It’s like owning the flat – the customer retains control over the administration and maintenance of the software, allowing for greater flexibility. This means that all data is dealt with internally, and in conjunction with an IT staff for support, the payoff is usually in security and supervision.
But ownership also means a higher original investment (hopefully paying itself off over time) unpredictable management costs, complex and expensive upgrade procedures, limited scalability, difficulties with optimization/customization and higher long terms costs.

Like owning versus renting a flat, neither is necessarily better and both can be, depending on the company’s needs regarding their business, security and technical requirements.