This is a question that we get asked frequently!  There are three basic points to consider:

• First:   What is the total cost of ownership?
• Second:   Do I have the personnel and processes in place to maintain it?
• Last (BUT likely the most important): Which solution makes my business the most productive?

The difference between On-premise and Cloud software is essentially where the software is installed. On-premise software is installed at your place of business on a server and accessed through your company’s internal network. Cloud software is hosted on the vendor’s server and accessed through the internet.

On premise advantages

Total Cost of Ownership – On-premise solutions will eventually have a lower Total Cost of Ownership (TCO). Typical breakeven is 18-36 months.

Complete control – You have complete control and decide on the configuration, including when to install updates and make any other system changes.

Internet not required – Having internet connectivity has some real-time advantages but is not available everywhere you might need to work. Your on-premise solution can function with either Wi-Fi or in batch mode.

Cloud software advantages

Cost – Cloud has less upfront costs. You make monthly or annual payments as an operating expense instead of a capital investment. The key is to calculate your maintenance and support services along with your annual cost and compare that to a one-time capital investment of an on-premise solution.

Less headaches – Upgrades and backups are taken care of by the cloud service provider.

Security – Your data is typically safer in the cloud because data centers offer more security than many businesses can afford.

Scalability – You only pay for what you use and can easily scale to meet demand.

Anywhere and anytime access – You can access your applications anytime and anywhere via a web browser from any connected device.

Which is the right for my business?

Every customer is different and has unique requirements that will influence the choice. Some organizations, especially government agencies don’t have a choice as there are policies in place dictating which can be used. The key questions to ask before finalizing your decision:

1. CapEx vs OpEx – Your accounting group can help with what makes the most sense. Also do you want a larger upfront investment with a lower long term TCO or do you want a lower cost to get started?
2. Backup and disaster recovery – Do you have the systems in place to back-up and secure you software and the data that you have accumulated over the years? Every couple of months we get a call from an on-premise customer that did not back up their system, has lost everything, and needs to start from scratch.
3. Accessibility – Who needs to use the desktop and mobile versions of the software and from what locations? Users working in the field requires the access remotely via the cloud, while those within your warehouse have either option available to them.

Total Cost of Ownership (TCO), who is responsible for software backups and updates and how and where do we access the software to make us the most productive are the key questions.

Finding answers to these questions on your own is not always easy. We can help you review each of these key points and find the answers you need.