The way a business stores data has transformed in recent years, with on-premise (on-prem) being the only option before cloud computing. As a business, your IT infrastructure needs to meet specific requirements and environments for efficiency and compliance; making a well-informed decision about which to choose is important.

There are key differences between on-prem and cloud, including location, cost, security, and implementation; all should be considered before deciding which solution is best for you.

This POV will highlight the differences between on-prem and cloud.

On Premise

As the name implies, on-prem environments are installed and run on a business’ own hardware infrastructure, which is locally hosted. This means that everything is done internally; all maintenance, updates, procuring, installing, configuring and security are done inhouse. No third-party involvement is seen in this instance, meaning the company has complete ownership and direct control of physical infrastructure, network connectivity and security measures.

There are 3 key differentiating factors when it comes to on-prem vs cloud: cost, security, and implementation.

Key Factors

COST: A business will have to purchase a licence to use the software, which is used on their own servers. This is usually a one-time fee based on the amount of users, and the opportunity for recurring fees for support, updates, and training on top of the one-time investment. Remember that it is likely you will need further assistance with using on-prem to keep up with maintenance and operation, usually through extended or additional support contracts.

Another consideration is Capital Expenditure (CapEx). CapEx is upfront investments made by a business with the intention of long-term benefits. Examples of this include servers, computers, and other hardware needed for an on-prem data centre. The value of CapEx depreciates over time, so upfront expenses aren’t usually deducted at once, meaning that the cost is spread out over a specific period. Be mindful of assets purchased as they can go unused if incorrectly implemented and budgeted for.

SECURITY: Although neither on-prem nor cloud are ‘insecure’, consider that on-prem puts the security inhouse. This means that no third-party has access to the data stored. Additionally, compliance to data protection requirements is easier to conform to as they are controlled by you. This is positive for businesses with extra sensitive information like banks or healthcare providers. With on-prem it is important to consider any software and hardware maintenance, the increased risk of human error if misconfigurations occur, and any related regulations that can lead to security and compliance threats.

IMPLEMENTATION: Generally, implementation for on-prem is significantly longer than for cloud. It can vary depending on requirements, but this usually requires the installation of software and hardware, with the hardware needing specific physical space inhouse for storage and best performance. Managing hardware on-prem will also affect ESG policies due to the power and fail safes required to keep systems running.


The cloud isn’t ‘up there’ like a lot of people think. A cloud solution is typically hosted by a third-party provider that hosts your applications and data in a data centre.

‘Cloud’ refers to servers that are accessed over the internet.  Any databases and software that are being utilised ‘on cloud’ are run on these servers. This generally allows businesses to pay on an ‘as you need’ basis based on overall usage, growth, and user requirements depending on the vendor contracts.

The cloud uses virtual technology to host a business application in a data centre that isn’t inhouse, with data being backed up regularly. Cloud services require less configuration, so any new software that is integrated into the environment is immediately ready to use.

Cloud services use data ingress and egress. Data ingress allows a business to move their data, free, into cloud storage. Data egress, however, describes data leaving a network and being transferred to another location, for example, moving from cloud to on-prem. Vendors have fees to transfer data out of cloud storage. Egress is used by cloud providers to encourage direct connections to transfer data rather than customers using the public internet, and most cloud providers charge a tax for this. Consider direct connection when it comes to costs.

Key Factors

COST: With cloud, there is usually a recurring monthly fee or an annual fee, meaning this is more cost effective. This allows businesses to be able to budget for the use of the cloud. Unlike on-prem, the cloud model allows businesses to pay for the resources they use, without the added maintenance costs that come with hosting your own software and hardware. Cloud is also scalable, so businesses can increase and decrease usage and functionality easily (with changes to the contract) and pay in accordance to their usage.

Unlike on-prem, cloud has Operational Expenditures (OpEx). OpEx refers to the purchasing of services over a specific period, for example, a subscription fee for cloud services. As a business you would have an agreed plan and can be changed with contract changes. OpEx is a fully deductible expense, meaning that businesses can claim a deduction in a tax return, making this a cost-effective option.

SECURITY: Cloud vendors are aware of data security. Comparing this to on-prem, cloud can raise more concern as the data isn’t in-house. Cloud providers are always ensuring the security features are updated and patched, investing in high levels of security to ensure your data is safe. This can also mean hiring 24/7 physical security for data centres, and ensuring there are sufficient fail safes in the case of power outages or security threats. When considering on-prem versus cloud, consider technical resources for staying up to date with security, as cloud can assist you with updates, resources, and compliance to ensure your data is secure.

IMPLEMENTATION: Cloud has a faster implementation period than on-prem, as everything is already configured. Allowing the software to be used immediately. Service providers maintain the hosted software and applications, but businesses can access them at any given time, allowing some control over their systems depending on the contract and third-party vendor.

Additionally, most cloud providers keep up to date with the most efficient hardware, meaning more performance benefits than on-prem (if it is not maintained properly). Using cloud results in less and fewer technical resources and allows staff to focus on other projects instead of worrying about internal systems. As your business grows, you can scale up your cloud usage (or down if needed), meaning cloud gives you the flexibility to upgrade when requirements change for capacity and storage.

What will benefit you best?

Ultimately, it is down to your business needs and requirements when choosing if on-prem or cloud is best for your business. It can be argued that the most important factors to consider are security and cost, but this again will depend on your organisation and IT strategy. Make the decision based on your needs.

Although on-prem does not promise added security, you will be in control of this.  Ensure that you have security protocols in place to lower chances of threats to your data.

With cloud you give up a certain level of known control, but get lower costs and shorter implementation timelines than on-prem. Additionally, you’ll have higher flexibility and reliability. If you are wanting a solution now, cloud may well be the option for you.


Responsiv offer both on-prem and cloud platforms in the form of Responsiv Unity and Responsiv Cloud.

Responsiv Unity is available as a modular Automation and Connectivity platform. It is set out to deliver a platform that is simple to install and operate, cost effective to use, and that can be targeted to solve a specific problem, or used as a foundation for multiple solutions. Custom platforms are also available based on business requirements.

Responsiv Cloud provides a set of full-service cloud offerings that simplify your hosting and systems support. Think of it as Responsiv Unity on cloud. Find out more about Responsiv Cloud here.

Get in touch to find out how Responsiv can help you decide whether an on-prem or cloud solution is best for your organisation!

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