Cloud Services

On-premise vs Cloud: Key differences and benefits

As a business owner, staying ahead of the curve in today’s ever-evolving technology landscape remains pivotal. In fact, one of the latest decisions organisations are having to make is having to choose between on-premise or cloud computing. On one hand, traditional on-premise solutions offer control and security, while on the other, cloud computing presents scalability and flexibility. 

While both have their benefits, let’s delve into the intricacies of on-premise and cloud computing, exploring their distinct features, advantages and potential drawbacks to help you navigate the path to a more efficient and resilient digital future.

What is on-premise software?

On-premise software refers to computer programmes and applications that are installed and run directly on a company’s own local servers or hardware infrastructure. Unlike cloud-based or Software as a Service (SaaS) solutions, on-premise software is physically located within an organisation’s premises, giving them complete control over the software’s maintenance, security and data. 

On-premise software usually requires a business to buy a licence or a copy of the software to use it. Due to the software being licensed and fully hosted within an organisation’s facilities, there is typically a higher level of security and safeguarding compared to a cloud-based computing environment. This type may be particularly beneficial for highly regulated industries that prefer to house their data and applications on-premise. 


On-premise computing presents many favourable benefits to businesses, particularly those who want to have complete control over their security. Companies can have complete autonomy over their IT environment, enabling them to customise software to align with specific operational needs and workflows. This level of control will, in turn, promote efficiency and enhance productivity.

Data security is another crucial benefit. On-premise software ensures that sensitive information remains within the company’s physical premises, reducing the risk of data breaches and maintaining compliance with industry-specific regulations and data protection standards.

And then there’s cost-effectiveness. While the initial investment may be higher than subscription-based cloud solutions, on-premise software typically involves lower recurring costs, making it a financially sound choice over time.

Finally, reliability is another key asset. On-premise software tends to offer consistent performance and availability, free from the potential outages and downtime that can affect cloud services.


That said, on-premise computing does not come without its fair share of disadvantages too. First and foremost is the high upfront cost. Acquiring and setting up the necessary hardware, infrastructure and software licences can require a substantial initial investment, making it less financially appealing for smaller businesses or startups.

Maintenance and updates are another challenge. With on-premise software, companies are responsible for managing and regularly updating their software, which can be time-consuming and resource-intensive.

Scalability can also be limited. Businesses may find it challenging to adapt to sudden increases in demand or expand their operations rapidly without incurring additional costs and complexity. 

Additionally, on-premise software is location-dependent. Employees may face difficulties accessing the software and data remotely, which can hinder flexibility and remote work capabilities.

Data security, while often considered an advantage, can also be a drawback. Businesses must bear the full responsibility for security measures and disaster recovery, which can be a considerable burden and risk if not properly managed.

What is cloud computing? 

The key distinction between cloud computing and on-premises software lies in their hosting approach. In an on-premises environment, a company manages everything internally, while in a cloud setup, an external third-party provider takes care of hosting. This arrangement enables businesses to adopt an as-you-need model, facilitating flexible scaling based on usage, user demands and company growth.

A cloud-based server employs virtual technology to host an organisation’s applications remotely. It eliminates the need for upfront capital expenditures, offers the benefit of regular data backup, and ensures that businesses only incur costs for the specific resources they utilise.

In addition, cloud computing offers almost immediate provisioning due to pre-configured setups. So, when a company subscribes and integrates new software into its environment, it becomes instantly accessible. This eliminates the need for time-consuming installation and configuration, granting users immediate access to the application.


Cloud computing offers numerous benefits that have revolutionised the way businesses operate. Most obviously, it provides unmatched scalability, allowing organisations to effortlessly adjust their resources and storage based on demand, which can lead to significant cost savings.

Accessibility is another major advantage. Cloud-based applications and data are accessible from anywhere with an internet connection, promoting remote work, collaboration and flexibility. Cost-effectiveness is also a crucial driver, with businesses paying only for the resources they use, reducing the need for expensive infrastructure and maintenance.

Of course, security is a priority in the cloud, with many providers offering robust security measures and data backup, ensuring data integrity and disaster recovery. 

And finally, cloud computing also simplifies software updates and maintenance, eliminating the need for manual installations and reducing downtime.

Ultimately, cloud computing accelerates innovation, as businesses can quickly adopt and deploy new technologies and applications without extensive development lead times, helping them stay competitive and agile in a rapidly changing digital landscape.


Just like on-premise software, cloud computing is also not without its drawbacks. One significant concern is data security and privacy, as storing sensitive information off-site can make it vulnerable to breaches and unauthorised access. The reliance on third-party providers means businesses will have limited control over the infrastructure and service delivery. 

Costs can also escalate over time, particularly for businesses with fluctuating workloads. Some find that the initially enticing cost savings don’t always materialise in the long run. 

In addition, downtime and service interruptions can further disrupt operations, as cloud services are reliant on internet connectivity. In fact, data transfer and bandwidth limitations can also hinder performance and speed, especially when handling large datasets.

Lastly, there is also the risk of vendor lock-in, where it becomes challenging to migrate from one cloud provider to another, subsequently limiting your flexibility and choice. 

What are the differences between on-premise and cloud?

The choice between on-premise and cloud computing represents a fundamental shift in how organisations manage their IT infrastructure.

On-premise solutions involve the physical hosting of software and hardware within an organisation’s own data centres, granting complete control over every aspect of the infrastructure. While this offers a high degree of customisation and data security, it demands significant upfront investments, along with ongoing costs for maintenance, staffing and hardware upgrades. Scalability is also limited, and adapting to changing workloads can be cumbersome.

In contrast, cloud computing leverages remote servers and services provided by third-party vendors. It provides scalability, flexibility and cost-efficiency, allowing organisations to pay only for the resources they use. Maintenance and updates are also handled by the cloud provider, reducing the IT burden on your business. You can also access the cloud from anywhere with an internet connection, promoting more collaborative work. 

However, it raises concerns regarding data security, control and compliance, and it may entail vendor lock-in and potential downtime due to connectivity issues. 

What’s best for your business, on-premise or cloud?

Determining the best solution for your business, whether on-premise or cloud-based, depends on a range of factors. On-premise offers maximum control and security, ideal for organisations with strict compliance requirements or specialised needs. However, it demands substantial upfront investments and ongoing maintenance.

Alternatively, cloud computing offers scalability, flexibility and cost-efficiency, enabling businesses to adapt swiftly to changing demands and promoting remote work. It suits companies prioritising accessibility and cost savings over complete control. 

But ultimately, your decision hinges on your specific requirements, budget and long-term strategy. Some businesses opt for a hybrid approach, blending both models to strike a balance between control and scalability. At Cheeky Munkey, we provide bespoke cloud IT services to suit every business needs. Our client-centric approach enables businesses to harness the full potential of cloud IT, so don’t hesitate to get in touch to find out more.

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