You put the software on a server that is located in your office building (on the premises). You access the software through your company’s network.

With on-premise deployment, you own the server, so you must pay to purchase, maintain, and upgrade it. And if anything goes wrong, it’s on you to fix it. Most companies rely on an IT expert to manage and maintain their office servers.

Cloud deployment does not have any hardware costs, and you don’t have to deal with server management or maintenance. You will have to pay for use of the cloud servers, and possibly additional fees for their upkeep.

With on-premise deployment, you usually have to be at your office to access the software on your server through your company’s network. You can set up remote access to the software through a virtual private network (VPN), but performance speed can be impacted as information has to travel through several layers and firewalls between your office server and your personal computer.

One benefit to on-premise deployment is that your software is not dependent on an internet connection. If the internet goes down, you still have access to your information through your servers (as long as you’re at the office). If damage occurs to your server or office building, however, like in the case of a flood, you may not be able to access your software.

Cloud software can be used any time, anywhere because you log in using the internet. You can access it on any internet-connected device anywhere in the world. If your internet connection is interrupted or unreliable, however, you may not be able to access your software.

If you live in a volatile climate, cloud software eliminates the worry that you won’t be able to access your software if you can’t get to your office or if your office is damaged due to bad weather. Cloud software allows you to work anywhere, so you can keep your business running whether you’re in the office or not.

With on-premise deployment, you usually have to manage software upgrades yourself or pay the software provider to manage them for you. Upgrades require you to install a new version of the software on your office server. The software and server cannot be used during this process, which means downtime for your business unless you can schedule the upgrades during off hours. In addition to the software upgrades, you must also manage service and upgrades for the server itself.

With cloud deployment, software upgrades are managed by the software provider, and server upgrades are managed by the cloud service provider. Software upgrades are installed on the cloud server and users are only given access to it when it is ready to go. This means no downtime for your business—you jump from one version of the software to the next seamlessly.

While most software comes with built-in security measures, with on-premise deployment, you are responsible for the security of your server and your network. Your level of security will depend on your budget and internal policies.

For cloud service providers, data security is a top priority. After all, if there is a data breach, they will lose customers like you. These providers usually invest more in security measures than an individual company could afford and offer services like continuous backups and disaster recovery plans.

With on-premise software, if you want to activate new features or add more users, you may be looking at additional hardware costs. Depending on the amount of storage space the expanded software requires, you may have to add servers. If you’re adding a lot of features and users, you may require a more powerful server than the one you have currently to handle the increased bandwidth.

With cloud deployment, you can easily add new features and users. You may have to pay for use of additional storage space, but this cost is usually minimal compared to the cost of a new server.