On-Premise vs. Cloud: What Is Best in 2023?

February 2nd, 2023
05 mins 12 seconds

Author: Denis Tumuhaise


The new world order of enterprise IT has heralded an increased adoption of cloud infrastructures. Cloud Computing has grown massively in popularity with its allure and promise to offer newfound flexibility for enterprises in terms of cost-saving, agility, and scalability. However, there are several critical considerations companies should make when deciding which IT infrastructural approach works best between on-premise and cloud models.

Unfortunately, many organizations are still confused when choosing the best infrastructural approach to their business while factoring in security, cost, and hardware. Today’s article unpacks the on-premise vs cloud debate to help create a foundation for any corporate decision-making relating to the two.

What is the on-premise model?

Also known as on-prem,on-premise is a computing model that is hosted on the on-site environment of the user, completely managed by a centralized IT department or a third-party provider.

As such, on-premise software is installed on the enterprise’s own servers and behind its firewall. On-premise applications are typically considered more reliable, secure, allowing enterprises to maintain a higher level of control in contrast to public cloud.

What is the cloud computing model?

Cloud computing is a computing model tasked with running workloads in a cloud environment. It’s a model where a organization owns the servers, storage, databases, and delivers it to customers.

Three types of cloud computing model exist, Infrastructure as a Service(IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS).

On-Premise vs. Cloud: Software Application Considerations

Whether an organization deploys its applications in the cloud or keeps them on-premise, data security will always be critical. For example, some businesses in highly regulated industries are typically required to securely maintain data on in-house servers and IT infrastructures to comply with regulatory authorities.

As such, on-premise software setups necessitate that organizations purchase a license or a copy of the software to utilize it. So, since the software itself is licensed, with the entire instance of software residing within an organization’s premises, there is arguably greater protection than with a cloud computing infrastructure.

However, the negative aspect of on-premise environments is the associated management and maintenance costs being exponentially higher than a cloud computing environment. For instance, on-premise setups require in-house server hardware, integration capabilities, software licenses, and IT support staff to manage potential issues that may arise.

Benefits and Risks: On-premise vs Cloud


Unfortunately, with most on-premise setups, resources cannot be rapidly provisioned to scale up or down based on any real-time need. This affects performance and general output in case of high demand or peak seasons. Most reputable cloud data centers are regularly upgraded to the latest cutting-edge fast, and efficient computing hardware. This spells performance benefits over on-premise setups, such as reduced network latency for software applications and greater economies of scale.

Access and Control
Business data, hardware and software platforms are all yours. Enterprises maintain full control of their data and what happens to it, for better or worse.Cloud is scalable and does not need new hardware to scale up or down. You can access your applications anytime and anywhere via a web browser from any device. Your access depends on a web connection.

Enterprises that deploy on-premise are responsible for the ongoing costs of the server hardware maintenance, power consumption, and space.Enterprises using a cloud computing model are only required to pay for the resources they use, without maintenance and upkeep costs. However, the pricing typically adjusts depending on how much is consumed.

Entities with highly sensitive information, like government and banking industries, must sustain a specific level of security and privacy provided by on-premise environments. Despite the benefits of the off-site cloud, security is a critical concern for many industries. As such, on-premise environments take precedent despite some of their cost drawbacks.Security challenges remain the number one barrier to widespread cloud computing deployment. Unfortunately, there have been multiple publicized cloud breaches. As such, many IT departments worldwide get skeptical when trusting cloud providers with personal information of employees like login credentials or even intellectual property.

Most technology-driven companies nowadays operate under some form of regulatory supervision and control, regardless of the industry. For example, the USA Health Insurance Portability and Accountability Act (HIPAA) ensures the safety of private health information. Generally, for organizations subject to such regulations, on-premise setups help them remain compliant as they know where their data is at all times.On the other hand, businesses that choose a cloud computing model should always do their due diligence to ensure that third-party providers are up to code and fully compliant with all of the different regulatory mandates within their respective industries. This can provide peace of mind that the privacy of customers, partners, and employees is ensured.

Resources are deployed within an enterprise’s in-house IT infrastructure. This means that longevity depends on how the organization maintains its solutions and related processes. Although, the lifespan of a computer is approximately 3 years nowadays.Resources are hosted on the service provider’s premises, accessible remotely by organizations at any time. In turn, this spells better longevity since maintenance is catered for by a third party.

As has been noted, there are several fundamental differences between on-premise and cloud environments. This means that the path for your enterprise could mainly boil down to your technical and security needs. Depending on your provider, these challenges can be quickly addressed. Just do your research.

Why is cloud better than on-premise?

in today’s work environment, the cloud is better than on-premise for multiple reasons. Due to its flexibility, reliability, cost and security, the cloud helps to remove the IT hassle of maintaining and updating systems, allowing you to invest your resources into your business goals.

V2 Cloud: Ease Your Migration

Regardless of the kind of environment you’re seeking, V2 Cloud can help you seamlessly adopt scalable cloud infrastructure, with hybrid integration, data transformation, secure file transfer, and end-to-end visibility capabilities all catered to.

With V2 Cloud, in three easy steps, you can have easily migrate to the cloud:

  1. Create your self-managed V2 Cloud account online or schedule a personalized demo with our sales team.It provides reduced licensing expenditure.
  2. Build your virtual computers based on your business location, number of users and application requirements in just a few clicks
  3. Our customer onboarding team will help install apps and migrate your data to the Cloud.


V2 Cloud’s intuitive management console allows you to easily add and remove users’ desktops, enforce security policies, publish remote applications, scale up or down computer resources, access your backups, and much more.

Written By: Denis Tumuhaise

Denis is a Professional Computer Engineer, Technical Writer, and Software Product Manager. With over six years of experience, he is exorbitantly passionate about helping businesses create software products and succeed with technology by simplifying complex tech topics.