There has been a debate going on in the enterprise software solutions industries: Should we move our systems on cloud or stay the legacy way- ‘Server based’!

With the Digital transformation game going strong in industrial segments, organizational leaders have been brainstorming on the advantages and disadvantages of cloud and premise solutions. While organizations are definitely moving in the direction of cloud, the debate is still on in the distance. It is therefore important to delve into the key differentiators of these deployment strategies.

Advent of Internet of things (IOT) has literally transformed the way daily jobs are performed. For instance, with smart home-automation devices around us, you can virtually control them from anywhere in the world. Nowadays, IOT Solutions are used extensively across business value chains. However, the big data generated through IOT puts some strains on internet infrastructure. This has made organisations rethink their strategies to keep data on local servers.

There are many factors on which Cloud and On-premise strategies can be compared:

1) Cost:

On-Premise solutions could seem to be a cheaper for the long run. However, the CAPEX Costs involved are very high because of the hardware involved for data acquisition and the storage required for data generated for ML Programs used in predicting possible asset failures (Predictive maintenance).

Cloud based solutions work on SAAS (Software as a service) models with minimal upfront cost and data analytics capabilities for better enterprise productivity. However, licensing models can nullify hardware cost savings.

2) Security

There is a myth that On-site solutions are more secure because Organisations have full control over the data. However, this sort of IOT infra is also sometimes prone to Cyber-attacks as it requires appropriate resource to manage the infra.

Shared Cloud solutions are sometimes prone to cyber-attacks as data can be accessed by third parties. However Private cloud can be as secure as it gets because of legal compliances with the cloud vendor.

3) Flexibility-Resilience

On-premise solutions are costly when up-time required is 99.99%.

Cloud option is much easier and in most cases more cost effective when building out multi-site/ geo-redundant server and storage

4) Software Customization:

On-premise solutions generally have standard user experiences. For example Predictive maintenance is currently the biggest use case in the IOT and Cloud computing domain. So if different industry users want to have different visualisation and values there are reliability and software support issues.

Cloud based solutions are quite stable in those terms and customizations are less time and money intensive. This makes it a much more relevant and dynamic route to take.

5) Software Deployments:

On-premise solutions can be easily deployed using existing unique IT infrastructure. But complexity can make it time consuming to deploy.

SaaS based solutions are quick and easy to deploy.

6) Agility and Scalability

On-premise solutions users have physical control over hardware. Therefore, upgrades can be strongly kept in check. However with an influx of industrial protocols, the demand is on an exponential trail and to justify all IOT use cases. It is difficult to research, justify and deploy hardware with the added complexity of certain applications not being compatible with existing IT infrastructure leading to an increase in cost.

Cloud solutions are generally very scalable to varying demand but management of cloud infrastructure is very critical.

7) IT Support

Industries have IT departments that look after IT infrastructures and Enterprise Applications like ERPs, MES etc. But to realize the benefits of all analytics solutions requires special skill sets, especially when applications are tailored to meet an organization’s unique requirements. For example SAP integration with Predictive maintenance of chillers for better value creation needs a lot more expertise on User experience and database part of it.

In case of On-Premise solutions everything is taken care of by the solution provider. The economies of scale inherent to cloud deployments mean that IT support can manage more with less time and effort. Also IOT applications like CMMS as well as Product Life cycle analysis software using predictive maintenance algorithms are generally patented, without any particular skillset required. The end client can generate more value using some of the in-house expertise of data scientists and developers.

8) Storage

On-premise solutions have limited storage on local server and the setups need much more complex infrastructures. Also Data processing and Data storage can be a challenging task for Organizations

In case of Cloud solutions, there is virtually unlimited storage since all the data processing frameworks are on cloud vendors. Also some data requires different time stamp storage according to business requirements. This can be easily incorporated in Cloud solutions so that Data analytics for Enterprise software can become easy and every system can be on the same platform. Organizational KPIs can also be tracked easily.


Decisively, with today’s ever growing business burdens and multifaceted business requirements in combination with relentlessly varying technology paradigms, organizations need to regularly revisit their IT infrastructure, whether on premise or cloud architecture, to ensure that their IT infrastructure delivers on its promise.

There are some concerns over security issues through the cloud solutions because it also requires reliable internet access to keep the solution productive. But nowadays the cloud vendor is already assessed and certified to meet its obligations to comply with regulations and standards, also possessing a private cloud over a shared cloud is a more expensive affair. Taking private cloud and developing an application based on the in house needs, requires a lot of skill from Software development, database management and Data science techniques to name a few. Presently, Organisations are not equipped to develop all these Enterprise data Lakes and get insights on improving overall Enterprise efficiency.

The cloud has already helped companies upturn their competitiveness today and will play a significant role in ensuring it tomorrow. Individuals who carry on to cast-off cloud solutions as not being flexible, secure or good enough will fail under the weight of their own IT costs and lack of agility. As of today, any company creating new IT assets that does not consider the cloud in some form is increasing the legacy burden that will make their move to the cloud more painful and their business less competitive.

It was a completely different scenario a few years ago, when consultants had to convince organisations to adopt cloud based solutions. Today, more and more organisations invest in cloud based solutions. Regulatory requirements have evolved and technologies are made more and more secure so companies do not need to be influenced or coaxed into opting for cloud solutions.

Those apprehensive about changing with the times to cloud should look into the overwhelming reasons to phase out their on-premise set ups. Currently Businesses work in a very competitive environments and those that stick to familiar but intransigent technologies risk being left behind.

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