The term on-premises refers to software that is installed and used locally by users within an organisation. On-premises is also sometimes referred to as on-premises or on-prem.
Companies choose to use on-premises software because it does not require third-party access. Organisations have control over servers and the software that comes with them, but this does require one or more employees from the organisation for maintenance.
Companies that operate in heavily regulated industries or have strict rules to follow often choose to work with on-premises software. This includes hospitals and credit card providers.
Software as a Service (SaaS) is more cost-effective than on-premises software. With SaaS, you can save on expenses that are incurred in on-premises software. For instance, you don't need to hire IT personnel to maintain and support your employees or purchase licenses and hardware.
Furthermore, integrating existing systems with new software may require significant time and money, which is not true with SaaS and other cloud-based solutions. You can reduce these expenses and streamline your business operations by choosing SaaS, increasing efficiency and profitability.
However, there are organisations that prefer this model because it is (often) more secure than cloud software. Besides, the software is installed and operational within the confines of the organisation's network, so security and IT personnel have direct access to it. This setup gives them direct control over configuration, management, and security.
Many traditional databases are on-premises. In recent years, there has been a shift to migrate IT resources to the cloud or create hybrid environments that use a mix of cloud and on-premises solutions.
Hybrid solutions use both on-premises and cloud software. The on-premises software forms a so-called "private cloud" that is located within the user's network boundaries. Less sensitive applications are hosted in the public cloud, so they don't take up physical resources.
The main advantages of on-premises software are listed below.
Annual maintenance costs and one-time license costs are lower than recurring costs associated with cloud software.
An on-premises environment provides users with full control and management of business assets. This is especially useful for people who work in heavily regulated sectors where privacy is a key concern.
On-premises software is also accessible without an internet connection. Multiple users can also access it simultaneously without sacrificing speed.
The main disadvantages of on-premises software are listed below.
Users of on-premises software face ongoing costs for space, server(s), and other equipment and additional power consumption.
Since users have full control and manage everything, the organisation needs a dedicated IT support team.
On-site systems need to be accessible near the user's office or field. Remote access can be difficult to set up.
On-premises, also known as on-prem, refers to software or hardware that is installed and operated within an organisation's physical location or on its own servers rather than in a cloud-based environment.
On-premises software offers increased control over data security, compliance, and customisation. It is also ideal for organisations with limited internet connectivity or those that deal with sensitive data that cannot be stored on third-party servers.
On-premises software is installed on local servers and is managed by the organisation, whereas cloud-based software is hosted and managed by a third-party provider and is accessible over the internet.
Examples of on-premises software include Microsoft Office, Adobe Creative Suite, and most accounting and inventory management software.
On-premises software requires a significant upfront investment in hardware and infrastructure and can be costly to maintain and upgrade over time. It also requires in-house IT expertise and may be less flexible than cloud-based solutions.
