Cloud vs. On-premise: The Pros and Cons

Mati Lerner
Cloud ComputingCloud Native
24 Jun 2023

Cloud computing has revolutionized how businesses store data. Before the cloud, on-premise storage was the only option. Organizations would set up and manage their own servers to host websites and applications. But with the advent of the cloud, companies are now taking advantage of its many benefits, such as access to information from any device anywhere at any time. The cloud also makes it easy for team members to collaborate online on the same document.

Additionally, when companies use the cloud, their applications don’t run on their own local machines, and as a result they don’t have to manage servers themselves. As cloud adoption is becoming more and more popular, many businesses are paying attention to the differences between on-premise computing and cloud computing to understand which one is the right choice for them.

In this article, we’ll give you a thorough understanding of the key differences between on-premise and cloud.

Let’s start with the basics: what does on-premise mean, and what is the cloud in general?


What Is On-premise?

On-premise definition: On-premise is the IT infrastructure and software located within an organization’s physical office and hosted on-site. In other words, on-premise means the software is installed on physical hardware that is owned by an organization, located in the physical premises of the organization, usually in the organization’s own data center. On-premise is also called on-premises or on-prem.

With on-premise computing, the IT staff has more control over the server hardware and the data configuration, security, and management because they can access the data physically. This means your internal teams have access to data and important information, and no third party can access it remotely.


What Does Cloud Mean?

The cloud refers to the software, servers, and services that run over the internet rather than locally on the computers and hardware of the organization. Cloud servers are located all around the world in different big data centers. You can access cloud services through your web browsers, such as Google Chrome and Firefox. Some cloud service providers also have dedicated mobile apps to access cloud services.

One of the key technologies for cloud computing is virtualization, which allows creating virtual machines. When multiple server machines run simultaneously, one virtual server is converted into several servers, and this also creates a whole host of data centers. This allows cloud service providers to serve more than one organization at once and at a reasonable cost.

Some of the examples of cloud services for consumers include Google Drive, Dropbox, Apple iCloud, OneDrive, and Netflix. If you’re interested in learning more, please see Ridge’s Guide to Cloud Computing.

How the cloud works
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On-Premise vs. Off-Premise

On-Premise: everything is in-house — all of an organization’s applications are hosted in-house, and the company has to purchase servers, software licenses, and office space and pay employees to manage the infrastructure. This means the organization is responsible for the security and maintenance of the software.

Off-Premise: on the other hand, means that you use the premises of the cloud service provider. The cloud provider takes care of the hardware and software maintenance and provides you with all the necessary resources, such as storage and databases.

Cloud service providers offer different cloud computing services to companies or individuals, such as  IaaS (infrastructure as a service), PaaS (platform as a service ), and SaaS (software as a service). Additionally, some cloud providers offer public clouds while some offer private clouds.

If you want to learn more about different cloud computing services, check out our Guide to IaaS, PaaS, and SaaS.


On-Premise vs. Public Cloud – Key Differences

Location and Hosting

One of the key differences between on-premise vs cloud is the location of the servers, operating systems, and software applications. On-premise software is installed in the computers and servers of the organization locally, whereas cloud software is hosted offsite on the server of the cloud provider, and you can access it through a web browser.

In an on-premise setup, everything is hosted in an organization’s on-premise environment, and resources are deployed within the company’s IT infrastructure. Maintaining the servers, software, and all the related components is the responsibility of the organization.

On the other hand, in the cloud, a third-party provider hosts everything in a public cloud. The cloud service provider is also responsible for maintaining the servers, software, and all the other resources.


Level of Control

With on-premises, the organization has full control over its resources, services, and data—who can access it and what happens to it. On the other hand, in a public cloud environment, data resides in third-party servers. This means if an unexpected issue occurs, you might not be able to access your data until the cloud service provider resolves the issue.



When it comes to cloud security vs on-premise security, many organizations trust an on-premise environment. With an on-premise environment, data resides within the organization’s own servers, so it offers a high level of security.

In contrast, security can be a concern with using a public cloud environment because of cloud breaches and hacking. However, if you choose a reliable cloud service provider with a high level of security like Ridge, security won’t be an issue.



When it comes to cloud vs on-premise cost, the cloud is generally cheaper. With on-premises solutions, your organization has to pay for the hardware as well as for replacements. Because you own and control the hardware, you pay for all maintenance costs.

In contrast, with the cloud, you don’t need to buy your own hardware or any physical infrastructure. The cloud providers are responsible for hardware, software, and maintenance, and they charge for it as a subscription cost, which is cheaper than buying and maintaining your own hardware.

When determining cost of on-premise vs. cloud infrastructure, you also must factor in the cost of the premises themselves. With on-premises, the organization also has to bear the ongoing costs of space, server hardware, and power consumption. All of these costs are bundled into one monthly fee for cloud space.


On-premise vs Cloud Data Storage and Computing Power

Cloud is scalable and provides on-demand services, which means businesses can use as much storage and computing power as they need. With the cloud, companies can add more resources as they grow and their requirements increase. In contrast, with on-premises, organizations usually have limited storage and computing power.

Below is a cloud vs on-premise comparison chart to give you a quick understanding of key differences between on-premise vs cloud.

cloud vs on-premise comparison chart
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On-premise vs Cloud – Which Is the Right Option?

Whether you should choose on-premise or the cloud depends on your requirements. For instance, if security is a big concern, on-premises might be the right option for you. But many reliable cloud providers also offer a good level of security. If you don’t have the budget to buy and maintain your own hardware, servers, etc., the cloud is definitely the best option. Additionally, the cloud is more flexible and scalable—you can add more resources anytime as your company grows and your requirements increase.

Private Cloud vs. On-Prem vs Hybrid Cloud

A private cloud or hosted private cloud is a computing environment where cloud computing services are offered to only one organization instead of multiple organizations sharing access to a public cloud.

It offers similar benefits to a public cloud, such as flexibility, scalability, etc. However, the organization has more control over the resources and more security and privacy. A hosted private cloud solution is owned and managed by a third-party cloud service provider.

An on-premise private cloud, also called an internal private cloud, is hosted and managed within the organization’s premises. All the IT infrastructure, cloud servers, and computing resources are located in the physical office of the organization. In an on-premise cloud, a company manages and maintains the cloud computing equipment by itself, which allows for more control over data.

A hybrid cloud refers to a cloud computing environment that is a combination of on-premise storage and private and/or public cloud storage. In a hybrid cloud setup, some data servers are located in the organization’s premises, but they are shared in different locations within the company through the cloud. Companies usually also pay for third-party-hosted public cloud space.

With a hybrid cloud, companies can store their sensitive data on-premises or in the private cloud and have more control over it. At the same time, they can host less sensitive data in the public cloud and benefit from its robust computational resources, flexibility, and scalability.


On-Premise vs. SaaS

SaaS, also called cloud application services, is a cloud computing service that organizations use. In SaaS, a third-party SaaS provider hosts and manages cloud-based applications that can be accessed over the internet. You can think of SaaS as cloud-based, ready-to-use software. In contrast, on-premise software is installed on computers or hard drives of a company.

On-premise vs SaaS comparison
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On-Premise to Cloud Migration

On-premise to cloud migration is the process of shifting your digital assets, such as applications and data, from your company’s on-premise infrastructure to the cloud. Once you have migrated to the cloud, you can access services over the internet from anywhere instead of only when in the office.

When you’re migrating from on-premise to the cloud, you can either choose to move your data and application offline or online. The offline approach is more expensive than online migration because you need to buy or rent several storage devices, and you also have to bear the costs of relocating them.

Cloud is now a popular choice because of the benefits it offers over the on-premise environment:

  • Cloud hosting vs on-premise costs: Cloud is flexible, and scalable as you only have to pay for what you use.
  • Easy access with global data centers: You can access your data and information from anywhere and anytime without being physically present in the office.
  • Hands-off maintenance: You don’t need to worry about the maintenance of the IT infrastructure, software, and hardware, and the upgrades.
  • Faster deployment: Cloud software is deployed a lot more quickly than on-premises software, which has to be installed in the device of each employee or team member.


The Ridge Solution

With Ridge, users can both maintain their on-premise infrastructure, as well as deploy applications on the cloud, and make their on premise infrastructure cloud-connected. Ridge Cloud enables companies to take advantage of the cloud’s flexibility along with the power of local data centers for cloud computing.

With Ridge’s platform, technology providers and system integrators can create and customize clouds to match their clients’ exact needs. By transforming existing capacity — in any public or private location or on-premise infrastructure — into a cloud-native platform, Ridge empowers businesses to run their workloads wherever they need to be. No matter whether they need to deploy in a private data center, on-premise, at the edge, or even in a multi-facility hybrid environment, Ridge enables them to integrate into any location and receive a full cloud experience.

See how it works…


Frequently Asked Questions (FAQs): On-prem vs. Cloud


What does on-prem mean?

On-prem is also called on-premises or on-premise. On-premise meaning is that you have your IT infrastructure, hardware, and software located in the physical confines of your office building. With on-premise hosting, you run your applications on your own servers, which are hosted in your data center in your physical office.


What is an on-premise network?

An on-premise network is a corporate IT network that is hosted and monitored within the company, and only your employees can access it. This gives organizations a higher level of control and allows their IT teams to personally configure the solutions according to the needs of the organization.

Linkedin Mati Lerner, Co-Founder & CEO | Ridge
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Mati is not only one of the founders of Ridge, but also a cloud expert. He enjoys writing about the benefits of cloud nativity & different cloud architectures.