On-Premise Computing vs. Cloud Computing

Two solutions have emerged within the era of the so-called Digital Transformation in order to remain competent in the face of new market needs: Cloud Computing and On-Premise Computing. Both options offer different advantages and disadvantages for the needs of your company. But, before going into details, it is worth mentioning what both options are:

let's start with the Cloud Computing that allows replace physical infrastructure with a cloud architecture, that is, the information, data, applications, platforms and services are housed in specialized servers that offer remote accessibility, which saves space, lowers investment energy costs, maintenance and training for the workforce. In addition, its easy access allows more effective communication between companies, employees and customers, from anywhere in the world. These Digital Transformation services are available on-demand through Google, Microsoft Azure and Amazon Web Service. 

In fact, there is a growing demand for multi-cloud architecture driven primarily by the scalability it offers and the need to improve each company's cost models. Currently about 62% of companies are implementing multi-cloud architecture strategies, this means that they are not only using a single service but several that connect and work with each other.

cloud computing on-premises computing
The advantages and disadvantages of On-Premise Computing versus Cloud Computing can be decisive for companies.

For his part, the On-Premise Computing allows to have the applications, platforms, services and infrastructure within the facilitiesThis allows physical access to information and direct control of the configuration, management and security of that data. The on-premise software does not depend directly on an internet connection, so if there is a failure in the links, the company will be able to continue operating without major problems.

For many years, this was the only possible option for IT companies to maintain the highest security standards and It has become embedded in the minds of many people. Although, it may present some problems of production expense, the costs associated with managing and maintaining having the software on-premises can be exponentially higher than those of a cloud computing environment. An on-premises setup requires internal server hardware, software licenses, integration capabilities, and expert IT staff to maintain and operate. But why are many companies preferring this model?

5 points of comparison between Cloud computing vs On-Premise Computing

As we mentioned, Cloud Computing uses a cloud-based server that uses virtual technology to host a company's applications off-site, so there is no capital expense, data can be backed up regularly, and businesses only have to pay for the resources they use. For organizations planning aggressive global expansion, the cloud has even greater appeal because it allows you to connect with customers, partners, and other businesses anywhere with minimal effort.

For example, the EDI software has traditionally been hosted by On-Premise Computing, but recent cloud computing developments have enabled EDI providers to offer their services through an EDI SaaS model. This development has saved installation costs for customers. Despite this, it is worth comparing this service with that offered by On-Premise Computing.

cloud computing on-premises computing
Cloud technology offers advantages over physical infrastructure in terms of cost, maintenance, and accessibility.


  • On-Premise Computing: Having the software in the facilities, the company has a greater responsibility in the maintenance of the applications, services, platforms and the processes related to each one of them, but they also have more control over each of the elements involved. Also, the installation can take several days.
  • Cloud Computing: By hosting its data, platforms and applications in the cloud, the service provider maintains the systems on its independent server (public, private or hybrid) that the company can access at any time from an internet access point . Even, cloud software can be installed in a matter of hours or a few days, so it is not necessary to have a physical server.

Control and maintenance

  • On-Premise Computing: In an on-premises environment, businesses enjoy full control over their systems and maintain 100% privacy, plus they don't have to share their valuable information with third parties. These are reasons why most large organizations choose to stay away from cloud technology. 

However, any hardware and software, storage, data backup, and disaster recovery must be kept on-premises. With limited technical resources and budget, this can become a problem, especially for small and medium-sized businesses.

  • Cloud Computing: In a cloud environment, although the data and encryption keys are shared with the third-party provider, there is shared ownership and accessibility can be an issue if internet connectivity ceases. 

But, I know you can access the applications from anywhere and at any time through any device or web browser. Being a hosted software, there is no need to worry or spend time on software or hardware maintenance, providers like Microsoft Azure takes care of everything you need to keep it running smoothly.


  • On-Premise Computing: Security is an essential requirement of any organization, especially those companies in the financial or fintech sector, customer and employee details are vital information. 

While traditional facilities seem more secure than internal ones, There are multiple measures that must be taken to fully maintain data security. In addition to a constant investment in technology for possible threats that may endanger the integrity of the software or hardware.

  • Cloud Computing – With cloud security systems, there is much less chance that any hardware, software, or infrastructure failure could hamper the entire operation and cause significant losses. In fact, many service providers have redundancy and disaster protocols for data security. 

For example, Microsoft Azure is backed by a team of over 3,500 experts, and proactive regulatory compliance. According to data from the company itself, they invest approximately one billion dollars a year in security to combat new threats.

cloud technology vs traditional IT
One of the weakest points of On-Premise Computing is its high maintenance cost and security problems.


  • On Premise Computing: a system from scratch requires a lot of effort and has a considerable cost. Not only must the initial investment be considered, together with the purchase of additional infrastructure and processes, but also the maintenance and operation costs that the company will have from time to time. However, the total cost of ownership is lower compared to recurring payments to cloud service providers.
  • Cloud Computing: A cloud service can be much more profitable, especially for those small and medium businesses. In fact, they can benefit from a saving of 36% of their expenses. Businesses only have to pay a nominal subscription fee, so there is no upfront cost, and the payment includes maintenance, support services, daily backup chargers, and licenses.

What's more, scalability technologies offer greater flexibility to adapt to the needs of each company. In this way, if there is a season in which you need a smaller amount of resources, the change of use is affordable and simple, taking a couple of hours or days.


  • On-Premise Computing: On-premises systems can be accessed remotely, but often require third-party support to access the solution and a mobile device. This increases the risk of security and communication failures. It is necessary to implement various security measures for employees to access files on personal devices.
  • Cloud Computing: With cloud systems, you need to have an Internet connection to access your data using a mobile device. Its mobility and flexibility is one of the strongest features of this option. This allows your employees to work from anywhere and at any time, resulting in lower fees for cloud application accessibility.

Other Disadvantages of Cloud Computing

Before you can decide whether or not to abandon On-Premise Computing in your company, it is important to take into account a couple of disadvantages inherent to cloud technology that may be key for you. Whatever your decision, always remember to schedule a consultancy with an expert team in the subject:

connectivity: The first major disadvantage offered by this service is that it is necessary to have access to the Internet at all times in order to access the stored data. This can be a significant limitation for some regions where speed and connectivity are not optimal.

costs: Total cost of ownership can be higher compared to an initial cost if it is spread over the complete life cycle of the systems. As we mentioned before, the costs of use and maintenance may be lower up front, but if the service is maintained in the long term, it can mean a higher total cost.

Personalization of the service- Complex development needs can sometimes not be matched by a cloud solution. Despite the constant evolution of cloud computing technology, they may not offer the same level of adaptability that you need. 


The perfect choice for your company may vary depending on your specific needs, including external factors such as regional connectivity capacity. However, as you have seen in the comparison of On-Premise Computing vs. Cloud Computing, cloud technology can be a good solution for small and medium-sized companies given the great savings in production it offers

In addition, unlike physical infrastructures, cloud service providers can adapt their charges based on the characteristics of the product and scale you need, storage, number of users, time and memory space, among others. factors. Therefore, you can choose a package that suits your budget and save costs.

cloud computing on-premises computing
Cloud Computing may be the best option for your company compared to On-Premise Computing.

In such a way that the client has to study in detail which part or parts of his Industry are likely to be transferred to cloud computing services considering the benefits and challenges that it represents. As we have suggested, A fundamental element will be knowing the data processing that have a special level of protection granted by the legislation (for example, the conditions under which the service is provided must be verified prior to contracting in order to determine whether they offer an adequate level of compliance or not) .

The conditions offered by the providers must be contrasted with a checklist that includes, among others, elements related to the information provided, location of the treatment, existence of uploads, security policies, user rights and legal obligations of the service provider . If you are interested learn more about this, discover the solutions it offers and will offer Codster through Cloud Computing technology, as well as its correct Implementation. Surely we have the perfect solutions for your company such as AWS partners (Amazon Web Service).

Alejandra Correa

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