When choosing an ERP system or how you will run your website, you will run into a crossroads: on-premise or cloud hosting.

Whoever is trying to sell you software will make it sound like one is the better choice across the board, but that’s not true. On-premise and cloud hosting each have their advantages and disadvantages, and while one may be better for more businesses, the other fills a different niche.

We’ll go through the differences between the two hosting options and how the benefits vs. risks stack up against each other.

Key Differences Between Hosting Styles

The fundamental difference between the two hosting methods is this: on-premise hosting is where the server is located in your business, and cloud hosting is when data is kept on remote servers.

On-premise hosting

With on-premise hosting, you have complete control over the server. This hosting is sometimes called “bare metal” or “dedicated” hosting because it provides dedicated hardware for the customer.

Cloud hosting

The cloud is a way for people to store and share files and allows them to access those files from anywhere in the world.

Cloud hosting allows people to store their data on remote servers rather than locally on their computers. This means you can access your data from any device with an internet connection, including mobile devices, laptops, and desktops. 

It is typically used when the business owner wants to avoid managing hardware.

On-Premise Hosting Benefits

On-premise hosting may be older and arguably outdated, but it still has pros. 

In general, on-premise gives you more control. Since you use your servers, you don’t have to worry about the performance of other people’s servers and internet connections. You also won’t have to worry about security issues or data breaches from someone else’s neglect or oversight.

While on-premise hosting is often more expensive upfront than cloud hosting, this is a one-time cost. In addition, the monthly prices for on-premise hosting are generally less than those for cloud hosting because there are no additional fees for bandwidth or storage space.

With on-premise hosting, you only have to pay for what you use, so in general, it’s cheaper in the long run. 

Another benefit is that with on-premise hosting, you can customize your system to meet your specific needs and requirements.

Cloud Hosting Benefits

Cloud hosting can be used by any company that needs to host their applications and data in the cloud. This includes small businesses, startups, and enterprises with large amounts of data to store. Cloud hosting has many benefits, which include the following:

    • Data protection: Cloud hosting offers protection against natural disasters or other incidents that might adversely affect your data.
    • Flexibility: With cloud hosting, you are not limited to the size of your hard drive, which means you can have more space for storing data.
    • Scalability:Since you don’t have any physical limitations, you can quickly scale up or down depending on your needs at any given time.
    • Security: Cloud hosting offers increased security because it does not require storing sensitive data on your hardware.
    • Accessibility: Information stored on the cloud is available everywhere, so everyone will have equal access to information if you have a global company.

Risks of On-Premise Hosting

One disadvantage of on-premise hosting is that the upfront cost can be prohibitive. The server must be purchased, maintained, and updated with the latest software and hardware. With the rise in cyber security threats, this can be a costly investment for any company. 

Another risk associated with on-premise hosting is that you won’t recoup the upfront price if you go out of business early.

You will only have access to the latest technologies if you are tech-savvy and have a dedicated IT department. Software is constantly being updated to take care of a multitude of issues. However, you will likely end up with outdated software and hardware, which could make you vulnerable to attacks from hackers. 

You also assume sole responsibility for the safety of your own data. For example, if your website is hosted in the cloud, then the service provider is responsible for backing up its data centers. But if there’s a natural disaster or another physical issue, you must rely on your backups.

 And finally, on-premise hosting can limit scalability and accessibility to your data if you need to access files remotely or have a global company.

Risks of Cloud Hosting

Cloud hosting is a popular alternative to in-house hosting. But it does have some risks.

The most common risk of cloud hosting is security. Since the data is stored where it’s accessible through the internet, cloud providers can’t guarantee that their servers are 100% safe from hackers. This means that the data stored on them could be compromised anytime.

If the hosting company suffers a data breach, your company’s entire customer database could be compromised. This is because when companies store their data in the cloud, it is stored on their server and on other servers that are part of the same network.

Another risk of cloud hosting is downtime. The servers might go down, and companies will lose access to their data until they are back up, which can take hours or even days to fix.

The last significant risk of cloud hosting is compliance with regulations. Companies need to be able to store and use their data in a way that complies with all laws and regulations, but this might not be possible when using a third-party provider like Google or Microsoft Azure.

On-Premise vs. Cloud Hosting: Which to Choose?

The choice between on-premise and cloud hosting isn’t cut and dried. Instead, it depends on your company and what you’re using hosting for. 

In general, on-premise hosting is best for companies that aren’t too spread out, have an IT team, and want more control over their data. 

On the other hand, cloud hosting is the better option if you need global access to data, don’t want to maintain servers, and want flexibility.

Acumatica Implementation & Consulting Services

Picking an ERP is never easy. There are so many options to choose from, each with its own set of features and benefits. If you are struggling to narrow it down, Confianz can help. If you choose Acumatica for your business, our experts will help you develop an implementation and integration strategy that causes the least disruption to your organization while still allowing you to upgrade your ERP.

Have a look at the different Acumatica Editions : Acumatica Distribution ERP, Acumatica Construction ERP, Acumatica Manufacturing ERP, Acumatica retail commerce ERP, Acumatica service management ERP.

Our team can help you find the solution that fits your business. So call us today to get started!

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