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What does On-Premises mean?

The term on-premises (abbreviation: on-prem) describes the installation of software on one’s own local devices. This field was introduced when cloud computing became increasingly popular and a term was therefore needed for the hitherto normal procedure of installing and running programs locally.

What does On-Premises mean?

When companies or organizations work on-premises, they mean that they maintain their IT infrastructure, as well as the software applications they use, completely independently and in-house. This means, for example, that they have purchased a company license for an enterprise resource planning tool (ERP tool for short) and installed it on their own devices.

In order for their employees to access it, a certain amount of computing power is also required. To this end, the company has provided local servers on which the data is stored and which in turn provide the power so that queries can be calculated. In the event of failures, the responsible employees in the IT department must rectify the problem as quickly as possible so that the system is operational again.

What is a Cloud?

Only a few years ago, when computers were not yet so widespread, it was quite normal for several users to be created on one computer. In it, the various people in a household stored their files or installed programs. Although all the pictures from the different users were physically stored on one computer, without the password of the others, the users only had access to their own pictures. Thus, if a father did not know his daughter’s password, he could not view her user’s pictures even though they were on the same computer.

User access to the central infrastructure | Source: Author

The principle of cloud computing works in a similar way, at least in the storage area. Here, many different users use one or more devices that they can access via the Internet. Although their data may be on a computer, they can only view their own information, since information about users is protected.

On-Premise vs. Cloud

Since on-premises and cloud are two very contrasting concepts, it is worth taking a closer look at the advantages and disadvantages of one system over the other. The advantages of on-premises are in most cases also the disadvantages of on-premises and vice versa.

In recent years, data protection has become increasingly important. With on-premises applications, internal data does not leave the company’s internal networks. This ensures that no outsider can access sensitive data unless they gain unauthorized access to the network. In a cloud environment, however, some sensitive data leaves the company and there is no control over what happens to it. Although agreements can be made with cloud providers about data processing, there is still an increased risk.

In addition, on-premises applications make you less dependent on Internet failures or network problems. By providing software or data locally, it is possible to work without the Internet. This is not the case with cloud applications.

However, on-premises applications provide the opportunity to achieve a high degree of personalization. Cloud providers often offer only a limited scope of services, which is sufficient for the majority of customers. Nevertheless, this may not be sufficient for some companies, which is why on-premises software offers the possibility to personalize the application for the capabilities needed.

When it comes to the cost factor, the cloud is ahead in many respects. On the one hand, cost-intensive servers and their infrastructure do not have to be purchased, and on the other hand, they do not have to be maintained by personnel. This means that high fixed costs for procurement and variable costs for maintenance can be avoided. Another cost factor is the establishment of backups, which in the case of the cloud is the responsibility of the provider. At the same time, contractual penalties can also be agreed upon, which become due in the event of a system failure over a certain period of time. Thus, the risk of the application can be almost completely outsourced.

This is what you should take with you

  • On-premises is a newly created term introduced with the rise of cloud applications.
  • It describes systems that provide the necessary infrastructure and installation of software completely locally and thus dispense with the use of cloud systems.
  • The advantage of such architectures is above all the high level of data protection and the ability to individualize them for their own use case.

Other Articles on the Topic of On-Premises

Dell offers an interesting piece on the comparison of on-premises and cloud systems.

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