Posted by Rachel Ho May 13, 2022 10:00:00 AM

While there's an increasing trend of adopting cloud infrastructure in today's enterprise IT landscape due to workflow automation and reduce time spent on repetitive tasks, many companies still maintain some of their systems and data on-premises. There are several factors to consider when deciding to move to the cloud or keep systems on-premises.

Besides accessibility, affordability, security, and usability, organisations also have to consider the ease of deploying a computing system before using it in the workplace. The on premise vs cloud comparison guide explains the differences between both computing systems.

What is On Premise?

On premise refers to when an organisation houses its IT infrastructure and applications within its own data centre. All hardware, software, and other associated equipment belong to the company and are managed on-site by in-house IT staff.

The main advantage of an on-premises setup is that the company has complete control over its environment. IT teams can customise their network according to the company's needs.

What is Cloud?

The cloud is a collection of remote servers accessed over the internet. Cloud services are delivered on-demand, and users only pay for the resources they use.

Cloud computing has become increasingly popular as organisations use it to reduce IT costs and increase scalability. The cloud offers many advantages over on-premises setups, including pay-as-you-go pricing, increased flexibility, high-end security, and improved scalability.

Cloud IT solutions are relatively more scalable, flexible, and secure than the traditional on-premise IT infrastructure. Due to this, small and medium enterprises (SMEs) across various industry verticals embrace cloud solutions due to several advantages.

Differences Between On-Premise and Cloud

When it comes to on premise vs cloud, your organisation's particular needs dictate which of the two models will suit you best. Keep the following differences in mind when making the decision.


Deployment refers to the process of making software available to users. The deployment model differs in on premise and cloud computing.

  • On Premise: The software is installed on local servers or desktops. Therefore, the organisation must maintain the IT solutions and all related processes. On-premises deployments can be complex and time-consuming, as each server or desktop is configured individually.
  • Cloud: Meanwhile, cloud-based applications are accessible via the internet. Some types of cloud computing solutions are private, hybrid, and public. Typically, deploying cloud solutions is easier since they require less maintenance.


Your business model will determine the level of control you need over your data. On premise and cloud solutions provide varying control levels.

  • On Premise: An on-premises setup gives you complete control over your environment since you own all the hardware and software. You can customise your network as per the enterprise's specific needs.
  • Cloud: The cloud is a shared environment, so you don't have as much control over the work environment. Since the third-party provider has the encryption keys, you may be unable to access your data in case of an unprecedented downtime.

Payment Model

Many companies stick to the on premise model because they're accustomed to the traditional way of doing things and feel more comfortable with it.

  • On Premise: With an on-premises deployment, you generally have to pay a lump sum for the software licence, which can be expensive upfront. However, you can onboard as many members as possible with this approach. Thus, it's ideal for companies that are constantly expanding.
  • Cloud: Cloud computing is a subscription-based model where you only pay for what you use. The payment model may be a flat rate or dependent on the number of resources your organisation consumes in a set period, typically monthly.

When organisations migrate to the cloud, they must be familiar with unexpected costs. For instance, your ''usage'' will increase if you onboard new members, and hence rising costs.


Security is a pressing concern in both on-premises and cloud deployments. Both models have benefits that companies must understand before deciding which model to deploy.

  • On Premise: An organisation has complete control over its on-premises security. IT teams can deploy security solutions customised to the company's specific needs.
  • Cloud: The cloud is a shared environment. Thus, security is also shared by the members of the cloud. Your third-party service provider will be responsible for providing secure cloud resources. Therefore, they will ensure the safety of hardware and cloud infrastructure. Meanwhile, the users are responsible for securing sensitive information in the cloud.

For instance, if an organisation stores client data in the cloud, it is responsible for encryption. However, the service provider will only be responsible for providing a secure environment for storing the data to prevent a data breach due to vulnerabilities in the server.


Scalability is one of the main advantages of cloud computing. Unfortunately, the number of licences purchased limits the scalability of on-premises setups.

  • On Premise: Enterprises can scale an on-premises solution by adding new servers or desktops. However, this option is expensive and time-consuming since the IT team has to configure each machine individually.
  • Cloud: Cloud solutions are highly scalable and easily adaptable for changing business needs. For instance, a company can quickly scale up its cloud resources during peak periods and scale down during slow periods.


The Covid-19 pandemic revealed a significant limitation in on premise solutions - lack of mobility. Therefore, the latter wins in mobility in a premise vs cloud comparison.

  • On Premise: An on-premises solution is not as mobile as a cloud solution since it's bound to a physical location. Employees can only access on-premises applications when they're in the office.
  • Cloud: A cloud solution is not bound to any physical location. Employees can access cloud applications and data from anywhere in the world. Since many companies plan to adopt entirely work-from-home or hybrid working models, the cloud is the way to go.


The On Premise VS Cloud debate is not new. However, it's become more relevant as more companies migrated to the cloud in recent years with through cloud strategies. Power your firm with Tessaract's business management software where you can manage your business with an all-in-one platform that streamlines your digital workflows and boasts the functionality and convenience of multiple corporate tools such as digital signing, client onboarding and even time tracking. In addition, the team leaders can authorise selective access to security solutions, advanced permissions, and privacy settings. Build a high performance culture with Tessaract's versatile software that enables your business to improve work performance, achieve OKR and KPI goals by working smarter through the digitalisation of your agile workflow.

Request a demo today to learn how Tessaract can benefit your business in today's digitally transformed world and stay ahead with the cloud.

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Rachel Ho

Written by Rachel Ho