Difference between cloud computing and on-premise computing

Difference between cloud computing and on-premise computing

Difference between cloud computing and on-premise computing

Table of contents

  • Introduction
  • What is cloud computing?
  • What is on-premise computing?
  • Difference between cloud computing and on-premise computing?
  • Conclusion
  • FAQs

Difference between cloud computing and on-premise computing


Today we are witnessing an era of constant innovations. The time for technology upgrades is at its peak. We can be sitting in our living room and through Virtual Reality (VR), can experience the view from a mountaintop. Similarly, because of so many advancements in tech and gadgets, we can offload many of our tasks to a simple software or application. Thus, by taking the load of many responsibilities that were historically carried out by humans, technology has improved our living standards. 

But some innovations shine because of their multi-factorial use. Such is Cloud computing technology. Since its creation, it has continuously gotten better at helping humans increase their productivity by many folds. However, this was not the case just a decade ago. People did not possess cloud tech before, and therefore, many duties and responsibilities were carried out by people. Some of these responsibilities included data storage, data analysis, networking and cybersecurity. All these duties were given to an IT professional that was hired by the company. That ‘IT guy’, was given a computer, an internet connection and an office to perform all these actions. This was simply called on-premises computing. 

We are here to discuss the difference between cloud computing and on-premises computing. So, without wasting any time, let’s dive into it;

What is cloud computing?

Briefly explained cloud computing is a system that allows anyone to view their data from whichever device is nearby. A broad range of services are included in the Cloud Computing category. Cloud storage, databases, data analysis, networking, and cybersecurity are a few of the prominent examples.

Almost all the major business conglomerates are using this tech to their advantage. The tech has created major profits for these firms. This is because by using this system, companies can ensure that all their IT problems are handled by a third party. This means that they do not require to set up a specific office or department for their IT needs. Also, they do not require to invest in highly expensive IT hardware and software.  

What is on-premises computing?

All the responsibilities mentioned above, which are now being performed by the cloud tech, were once all performed by a team of people inside the same office building where the rest of the company was working. On-premises computing simply means managing and installing hefty hardware and software where the office is located. 

This becomes our focus point because the basic difference between cloud computing and on-premises computing is this only. Some differences are also mentioned below;


Firstly, it is clear by the name “on-premises”, which means “on-location”. The biggest difference between cloud computing and on-premises computing is the difference in their respective locations. Cloud computing technology is a web service-providing tool, meaning that an organisation that requires computing skills will have to involve a third party. That third-party firm will then take care of all the IT needs of that company. In on-premises computing, the IT professionals are hired by the company and they are physically present inside the company infrastructure.

Ownership of the operation

In cloud computing, the ownership of the IT department is not with the company that hires them. Instead, the IT guys are hired temporarily by large firms to perform some tasks on their behalf. However, in an on-premises setup, the whole operation is managed and owned by the parent company and an office is allotted to the IT team. Here, everything the IT department does is owned by the same company. 

Cost of operations

When the cloud technology is in use by a big firm, that firm doesn’t have to invest heavily in computer systems and highly expensive software. Instead, they can just pay the third-party web service provider monthly and yet use all the IT services they need. On the other hand, the on-premises setup can cost much more as the whole team would need to invest in hardware as well as software. Also, there will be additional expenses for maintaining and repairing the hardware of the entire IT department. 

Security comparison

By the nature of data, everything that is under the direct control of the organisation will have better security and protection. That is why, on-site computing is still somewhat usable. In cloud computing, all your data is managed by a third-party firm. Although even these firms use the highest levels of security for their client’s data, there may be some companies which might have a set of standards that may not match with the third-party firm.


After all this research, I still couldn’t reach a verdict on which computing system was better than the other one. Mainly because this world doesn’t work that way. There is a simple philosophy in life, “To each his own”, meaning it is up to the person or in this case, the company to decide which system they want to work with in the future. Both systems have their advantages and disadvantages. 


Q. What makes a cloud system better?

A. The easy accessibility to your data, reduced headache of managing a large amount of data and reduced workload are a few examples that make the cloud a good option.

Q. Which system is better for micro and small businesses?

A. As you have mentioned micro and small businesses, my suggestion would be not to invest in a highly expensive IT department right now. You should hire a cloud computing firm and focus more on the quality of your product.

Q. Which system is more cost-efficient?

A. When a direct comparison is made, the cloud system is much cheaper than on-premises.

Q. How can I start building my IT department for my business?

A. First you need to decide what strength of the IT team you need. Later start conducting interview sessions with new talent. Select the best based on their practical knowledge.

Q. Why is on-premises still in use?

A. As mentioned above, there are still some businesses that prefer owning their own IT department due to safety and security reasons.

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