Microsoft software
4 min

Advantages and disadvantages on-premise licenses

4 min

Which is better: on-premise or cloud? Many established companies are wondering whether it is worth moving out of their on-premise technology infrastructure to the cloud. To choose which option is right for your business, you need to be aware of the differences between on-premise and cloud-based services and infrastructure. We explain it below.

What is on-premise?

On premise means that the infrastructure for software and hardware is implemented and executed within the boundaries of your organization. You have full control over the setup. Data remains in your private network, no one but your team can access the information.

What is cloud computing?

Cloud computing is the delivery of on-demand computer system resources, which does not require active management, and includes applications such as storage and processing power. With a cloud-based subscription model, there is no need to purchase additional infrastructure or licenses. In exchange for an annual fee, a cloud provider maintains servers, network and software for you.

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What types of cloud computing exist?

There are three main types of cloud environments. Businesses can choose to run applications on public, private or hybrid clouds, depending on their specific requirements.

Public cloud: A public cloud environment owned by an outsourced cloud provider. It is accessible to businesses via the Internet on a pay-per-use model. This deployment model provides services and infrastructure to businesses looking to save money on IT operational costs, but it is the cloud provider responsible for creating and maintaining the resources.

Private cloud: This deployment model is a custom infrastructure owned by a single company. It provides a more controlled environment in which access to IT resources is more centralized within the company. This model can be managed internally or externally. While private cloud hosting is relatively expensive, it offers larger companies a higher level of security and greater autonomy to customize the storage, networking, and compute components to meet their IT requirements.

Hybrid cloud: Hybrid cloud is a deployment model that connects a company's on-premise and private cloud services and the public cloud of third parties into a single flexible infrastructure to run the organization's applications and workloads. By combining the models, a hybrid cloud model provides a more customized IT solution that meets specific business requirements. View our range of on-premise volume licenses here.

The benefits of on-premise

On-premise has a number of advantages in terms of costs, security, personalization and implementation:

  • Long-term costs are lower than cloud-based software.
  • The security of the data is in your own hands.
  • Easy to personalize.
  • More control over the implementation process yourself.

The disadvantages of on-premise

In the areas mentioned above, there are also disadvantages with on-premise:

  • The initial costs are high.
  • Not every company has enough in-house knowledge to arrange security itself.
  • Personalization can cause the implementation process to take longer.

What suits my organization: on premise or cloud computing?

On-premise and cloud both bring something unique to the table, but only after careful consideration can you determine which type of solution fits your organization perfectly. Below are the key aspects to consider when choosing between an on-premise and cloud solution.


On-premise: With on-premise software, the company remains responsible for the maintenance of the solution and related processes. The implementation is done in-house using the company's infrastructure.

Cloud: In a hosted cloud, the service provider maintains the systems on their server, which are accessible to the enterprise at any time, with the associated processes being taken care of by the host cloud service provider.


On-premise: In an on-premise environment, enterprises have full control over their systems and maintain 100 percent privacy. These are two reasons why most large organizations choose to stay away from the cloud.

Cloud: Even though the data and encryption keys are shared with the third-party provider in a cloud computing environment, there is only shared ownership and accessibility remains an issue when there is downtime.


On-premise: Security is an essential requirement of any organization when it comes to financial account, customer and employee data. While traditional on-premise may seem more secure because it is in-house, there are multiple measures that must be taken to fully maintain data security.

Cloud: With cloud ERP systems, there are far fewer opportunities for hardware, software or infrastructure failures that can hinder the entire operation and lead to significant losses.

Regulatory Compliance

On-premise: There are regulatory controls that companies must adhere to. To comply with these government and industry regulations, it is necessary that companies continue to comply with the rules and have access to their data. This can be easily done if all data is managed by the company itself.

Cloud: When opting for a cloud computing model, companies must ensure that the service provider is legally licensed within their specific industry. It is important that the data of customers, employees and partners is secured, while privacy is guaranteed.

Cost comparison

On-premise: A system from the ground up requires effort and costs. Not only the initial investment, but also the purchase of additional infrastructure, processes, maintenance and operating costs. As mentioned with the pros and cons, the initial costs are high, but on-premise is a lot cheaper than cloud in the long run.

Cloud: In comparison, a cloud service is much more cost-effective, especially if it is small. The installation and running time is then cheaper and faster. Businesses must pay for a subscription, with updates and maintenance being performed by the cloud host.


On-premise: On-premise systems can be accessed remotely, but often require third-party support to access. This increases the risk of security and communication failures. Several security measures must be taken if employees want to access files on personal devices.

Cloud: With cloud systems, you need an internet connection to access your data with a mobile device. Its mobility and flexibility is one of the strongest features of this solution. This allows your employees to work anywhere and anytime, resulting in higher engagement.

The main difference between on premise and cloud

The main difference between a cloud and on-premise software is where it is installed, either locally on the company's servers or hosted on the supplier's server. Compared to cloud software, on-premise offers more flexibility, reliability and security. Hosted cloud software, on the other hand, takes the pressure off of maintaining and updating systems, so you can spend your time, effort, and money fulfilling your core business.

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Request a quote for cheap Microsoft licenses!

Do you want to purchase on-premise licenses with a discount of up to 70% on the new price or are you thinking of a hybrid cloud environment where you are looking for a solution with the advantages of on-premise combined with the advantages of the cloud? View Softtrader's range of second-hand software licenses or request a quote directly.

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