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Author Lars Normark Holmgaard
Published on September 21, 2021

What Are the Pros and Cons of On-Premise vs Cloud Software?

In this article, we’ll discuss the why’s, what, and when for on-premise software versus cloud software.

Overview

  • Why is cloud-based software even a thing?
  • How do you offer cloud-based software to your users?
  • Why are some corporations still looking at on-premise software?
  • What are the “hidden” downsides of doing on-premise software?
  • One-to-one comparison

Why is cloud-based software even a thing?

There is no arguing, times are changing and evolving – People are evolving, we are getting smarter, expecting more from almost anyone around the workplace, not to mention the tools and software we use.

Pros and Cons of On-Premise vs Cloud Software

Some years back software companies started digging into moving some or all of their software into the cloud and the reasoning was pretty much the same for all of them. They all struggled with piracy, they all struggled with software updates and they all wanted to make it easier for their users.

Piracy and troublesome software updates almost do not exist. Users are happier as they gain easier, cheaper, and faster access.

The challenges of offering cloud-based software?

Redundancy, security, speed, and fallback are all factors a provider has to take into consideration. Naturally, when a provider first offers their cloud-based software, these factors would be at their lowest level. Low redundancy, security at minimum, inadequate response times, and most likely no fallback. Learning from mistakes, money flow, and smarter people change all this, offering cloud-based software with no downtime, super high security, excellent response times, and no matter where, in the world, you have access.

Other factors are server capacity, databases, and backups – these are factors controlled and engineered by the developers of the software. The developers have to make sure they allocate enough server resources, databases, and run backups on the fly.

Optimally, you plan for sites around the world, to make sure that if one server site is compromised, another will take over. Response times are another great advantage when you plan sites around the world (Response time, means the time it takes to send one data package from the user’s computer to the server site and back, and the longer it is the worse the experience for the user). Solving this, or avoiding long response times, requires sites in different continents. For example, having sites in both North America, Europe, and Asia will ensure users in those continents to have low response times and a happy experience.

The recipe is of course different for each software provider depending on need, protocols, abilities, and also financial situation.

Why are some corporations still looking at on-premise software?

There can be several reasons why a corporation would prefer an on-premise software solution. Financial institutions are one industry that very frequently chooses an on-premise solution and the main reason, from their perspective, is security.

Documents, data, internal statistics, etc. are most likely stuff they don’t want to get into the wrong hands. Since it’s not easy to “trust” cloud-based software, they tend to stick with on-premise solutions that they control themselves in-house.

What most of these institutions don’t realize is that they don’t necessarily have to compromise any data using a cloud-based software solution. A great example is digital signage and the way you transport the data (Confidential or not). Normally all data would be uploaded to the cloud and then downloaded to all the players running content. Consequently, this compromises their data due to the fact that they can’t be 100% sure that data is secured, even though it’s transported in the safest way possible.

There are ways to deal with this and to avoid data ever being compromised. If we use the example above and remove the need for data to be transported to the cloud and instead leave it internally on the network, those confidential files never reach the cloud or the public internet.

Financial institutions are not the only ones who prefer an on-premise solution. Bigger corporations are also prone to choose an on-premise solution as they have the resources in-house and in some cases make it a better financial solution.

But there is a downside most corporations don’t see in the beginning. Aspects of the downside are described in the next chapter.

What are the downsides of doing on-premise software?

We say “downsides” in the headline. “Downsides” includes anything from running cost to limited access.

  • Software updates can be frequent and in most cases, they have to be installed manually.
  • Security updates are in most cases on a weekly or monthly basis and should never be ignored.
  • The software will require more resources and perhaps even more servers as the corporation grows.
  • The servers, running the on-premise software, consumes power and generates heat.
  • Implementing new functionality can be a struggle depending on servers, operating system, network, etc.
  • Accessing the software from outside the network can be troublesome.

The points listed above can quickly become a maintenance and troubleshooting nightmare for any size IT department.

We advise anyone that considers an on-premise solution to weigh in all factors before choosing what path they take. Always keep in mind that most cloud-based software providers have taken all of these factors into consideration for you. Don’t look at the short-term picture, do all your calculations, find the provider that gives you the security you require, and then choose a path.

One-to-one comparison

The following is based solely upon the digital signage industry and can only be used as a guide for other cloud-based software.

On-premise software solutions

Pros

  • You have full control
  • It’s an investment

Cons

  • High Maintenance
  • Software updates
  • Security updates
  • New features need to be manually added
  • Access from the outside can be restricted
  • Supporting users put more load on internal departments
  • Low energy rating
  • High electricity consumption
  • Higher heat projection
  • Hardware cost
  • Hardware expansions
  • Bulk licensing

Cloud-based software solutions

Pros

  • No maintenance
  • Automatic updates
  • Highest level of security on the fly
  • Fastest response times around the world
  • Easy access
  • No extra electricity consumption or heat projection
  • No server hardware needed
  • Add as you go
  • No user limits
  • Pay for what you use and nothing more
  • Get all new features automatically
  • Dedicated support team to help users
  • Choose between cloud-location files or internal files

Cons

  • Price per screen a bit higher overall in the beginning

Round-up

Over the years we’ve swapped many on-premise solutions with our cloud-based digital signage and there are two main reasons for doing this. The first and most significant reason is maintenance, and I am not only talking about hardware, but software updates, new features, new demands from the teams, response times, support, and lots lots more. IT departments, no matter the size, give up and prioritize other stuff, neglecting their digital signage and within a couple of years, there are no saving it anymore.

The second main reason is that it’s economically not a great solution. The fact is that down the line this becomes a big thing, not due to the fact that hardware needs to be replaced, maybe not the added electricity or need for cooling, but the manpower required to keep this running.

At Play Digital Signage we’ve eliminated all the downsides of cloud-based digital signage. We give you all the advantages and have taken away all the limitations. For example, if you are a financial institution that can not allow data and files (Also known, in our world, as content) to be transported over the public internet or cloud-based storage we offer an internal file option where files never leave your internal network.

We’d love to tell you more about digital signage in the cloud, book a demo here.