Cloud-based vs. On-Premise Software: Which model suits you?

If you opt for individual software development, sooner or later the question arises: Where should the software be operated? In the cloud or on own servers (on-premise)? Both models have their permission and have specific advantages and disadvantages. In this article we help you make the right decision for your company.

The direct comparison

Criterion Cloud On-premise

Initial investment Gering (OpEx) High (CapEx)

Current costs Monthly fees Maintenance, staff, electricity

scalability Immediately elastic Planning required

Control Limited Fully

Data sovereignty Depending on the provider Fully

Maintenance From the provider Owner responsibility

Availability SLA guarantee Responsible

Access From everywhere Often only internal/VPN

Cloud-based software

What does cloud mean?

With a cloud solution, your software is operated on servers of a cloud provider such as AWS, Microsoft Azure or Google Cloud. They pay for the resources used and do not have to worry about the infrastructure.

Cloud benefits

• Quality provision: New resources are available in minutes

• Elastic scaling: Automatic adjustment to load peaks

• No hardware investment: No own data center needed

• Global availability: Access from anywhere with Internet connection

• Automatic updates: Infrastructure is maintained by the provider

• Disaster Recovery: Built-in backup and recovery options

Disadvantages of the Cloud

• Running costs: Monthly fees can sum up

• **Vendor Lock-in at proprietary services

• Data protection concerns: Data are on external servers

• Internet dependency: Without connection no access

On-Premise Software

What does On-Premise mean?

For an on-premise solution, run the software on your own servers in your data center or server room. You have full control over hardware and data.

Advantages of On-Premise

• Full control: Complete sovereignty over data and infrastructure

• Data sovereignty: Data never leave your company

• No running cloud costs: Low operating costs possible after initial investment

• Compliance: Easier compliance with strict data protection requirements

• Independence: No dependency on external providers

Disadvantages of On-Premise

• High initial investment: Hardware, licenses, setup

• IT staff required: Own experts for operation and maintenance

• Scaling complex: New hardware must be purchased

• Responsibility: Play updates and patches yourself

The hybrid approach

The best of both worlds

Many companies opt for a hybrid approach that combines cloud and on-premise components. Sensitive data remains in your own data center, while less critical applications