On Prem Software Overview

What is “On Prem” Software?

“On prem” is short for “on premises.” On prem used to be the commonplace approach for software deployment before cloud computing was available. This term often comes up during conversations about the cloud. That’s why understanding exactly what on prem is and how it relates to your IT infrastructure is important.

What is “On Prem”?

On prem refers to the hardware and software that your organization handles on site. You have the physical servers in your own buildings. The software is installed on this equipment or workstations. In some cases, the software and equipment are at a dedicated data center located close to the office’s location.

On prem is the traditional approach for business software and hardware deployment. Before networking technologies and the internet became commonplace, people used to access software through the workstation it was installed on. Your organization handles the procurement, implementation and maintenance of on-premises technology.

What is Cloud Computing?

Cloud computing is technology that you can access remotely through a third-party service provider. You connect to applications, platforms and hardware resources over the internet. The cloud service provider sets up and maintains all the equipment needed to power this technology.

Cloud technology has transformed the way organizations approach their software and hardware deployments. They didn’t have a choice when it was only on-premises solutions. The cloud is a mature and viable option for many use cases.

What is the Hybrid Cloud?

The hybrid cloud covers IT infrastructure that uses cloud resources for part of its operations and on prem solutions for others. This approach seeks to take advantage of the best parts of the cloud and on-premises.

The cloud-based part of the hybrid cloud may be divided between the public and private cloud. Public cloud solutions are those that require the user to access it via the public internet. A private cloud is hosted on equipment that your organization controls. You connect to the resources on the private cloud through your company’s internal networks. Or, you connect to them through a firewalled connection to a dedicated data center.

On Prem vs. Cloud vs. Hybrid: Pros and Cons

Each IT infrastructure model has its strengths and weaknesses. The right configuration for your organization depends on your priorities. Here are the key things to keep in mind during this decision-making process.


Cost is one reason that companies frequently choose the cloud. The cloud service provider pays for the upfront equipment costs needed to host the application or platform. They also shoulder the ongoing development costs to keep their cloud software up to date and relevant in the marketplace. If something goes wrong with the solution, their team fixes it.

You pay for cloud-based services via a monthly fee or a pay-as-you-go model. The lower total cost of ownership can help smaller organizations gain access to the same resources that enterprises use.

If you choose on prem software, you need to pay upfront for the servers and equipment needed to support its deployment. The software provider typically charges a license fee for each installation of on prem software. The software developer often provides customer service for the application itself. But your IT department has to handle any issues related to the underlying hardware. If the software developer updates the application, you have to pay an upgrade fee or another license cost.

The hybrid approach is more expensive than a purely cloud configuration. That’s because you have on prem hardware or software somewhere in the equation.


Another area where the cloud stands out is in technology upgrades. Many cloud service providers have a continual development process for their software. They handle the testing and deployment process themselves. As a result, you don’t have to schedule software installation around busy projects and other initiatives that don’t work well with downtime.

You may have limited ongoing support for on prem software. Feature updates can be few and far between. Also, you may need significant resources to upgrade your copies. If something goes wrong during the software roll-out, you could face a large-scale drop in productivity. Or, you may face another detrimental effect. You may have to rely on custom development to get the features that you need to remain competitive and run your operations smoothly.


On prem software has the advantage of being located completely in house. You set the security standards that everyone in your organization must follow. No third-party provider has access to your data, which improves its privacy. Also, this may be necessary for certain regulated industries. You also eliminate the need for going across the public internet to connect to your software.

However, your IT security budget may not be as large as that of the cloud service provider. If they’ve invested in better security resources than your organization has, your software may end up being safer in the cloud. Encryption can help you protect your data as it transmits from your business network over the public internet to reduce your risk.

The hybrid configuration is the real standout feature when it comes to security. You can reserve your sensitive data and hold it on on-site databases so that it remains completely under your control. Software and data that are suitable for the cloud can be split off to third-party services for access to enterprise-level security measures.


The cloud excels at scalability, which is one of its greatest advantages. Many cloud applications and platforms allow you to increase and decrease your capacity with a few clicks. Provisioning is almost instant and allows you to quickly react during periods of unexpected growth. You may end up paying less per user once you reach certain subscription thresholds.

In contrast, on prem software scaling is an arduous task. Your IT team must procure and set up the necessary servers and hardware to meet the maximum demand for your network resources. If you don’t have enough equipment on hand, you have to locate a supplier for a rush order.

Your business network may need to go down while you’re upgrading your systems. This downtime can negatively impact the sudden surge of demand you received. Depending on the scale that you’re dealing with, your in-house IT team may not have enough people to test everything thoroughly before pushing it live. If demand goes down, you still have a lot of servers sitting around and gathering dust.


The cloud uses distributed, software-defined resources that lend themselves to an environment with a lot of redundancy. Your access to cloud-based software is not impacted by a single point of hardware failure. This is because failsafes will direct your request to an available server instead. In the event of a natural disaster at your office location, the cloud has the advantage of being in a geographically diverse location. The service provider may have data centers all over the world to avoid weather patterns and other circumstances knocking out access to their software.

On prem software may lack enough redundancy to prevent unexpected downtime. It entirely depends on the budget that you have available to set up these backup systems. You also need to test the backups to ensure that they will work when you need them.

The hybrid cloud can use a combination of public and private cloud services, as well as on prem software, to create a highly available system. But it would drive the cost up if you had to rely on a lot of on-premises resources to accomplish this goal.


Your industry may have regulations that dictate the types of technology that you can use. If you must retain full control and physical access to your servers, then the cloud would be a poor choice for this use case.

Some cloud-based providers offer services that accommodate strict regulations and compliance measures. For example, you commonly see HIPAA compliant cloud solutions for the healthcare industry.

On prem can make many types of compliance easier. That’s because you’re not involving a third party in your adherence to these regulations. You don’t have to worry about whether they are also following all guidelines. If you use cloud technology and your provider fails to meet the requirements, then you may be the one getting the fine.


The prospect of giving a third party access to sensitive data and trade secrets doesn’t go over well in certain industries and markets. You may also have issues with giving up significant control over your IT resources to the cloud provider. Critical business systems may be too important to trust to someone else. If you’re in that situation, then retaining an on prem or hybrid cloud approach can be the best option.

You control everything from start to finish with on prem software. You’re working with your equipment and your people throughout the process. The flexibility is particularly helpful for organizations that have highly specialized needs that aren’t served by non-custom software. You have full visibility with every aspect of your on prem software. This advantage can aid the decision-making of those in leadership positions.

Final Thoughts

On prem software and cloud-based software both bring their own benefits to the table. You don’t need to choose either one or the other if certain characteristics make both sound attractive to your organization. The hybrid cloud approach allows you to choose the elements of the cloud and on prem software that work best for your organization.

The software and hardware that you use should help you achieve your business goals. During your evaluation process, keep your priorities in mind when you’re making your selection.

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