Cloud vs On-Premise Comparison for Document Solutions: What Does Your Company Need?



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Cloud vs on-premise comparison is a relevant issue for most modern solutions, so it is for document management software too. This is especially important for small businesses that are trying to save operational costs on setup and maintenance, thus asking this question when choosing a business solution. Even though more and more companies are adopting cloud solutions and their market share grows, numerous companies still rely on legacy inbox systems. Therefore, let’s end this discussion with relevant arguments.

On-premises vs. Cloud Solutions

We have all mentioned the growing popularity of cloud computing solutions in all aspects of business, as they often more flexibility and financial profits in the case of scalability and maintenance. However, cloud computing document management solutions haven’t been there for long time, and before this era, all businesses used to adopt on-premise solutions. Even now, when on-premise solutions are continuously losing their market positions, many companies still prefer them due to some reasons, and mostly because it is quite difficult to switch to a cloud solution from an on-premise system – or it seems so for businesses that don’t love taking risks.

On-Premises Software

When you see a company that totally relies on on-premise software, there is often a genuine question – why? Cloud computing document management solutions are cheaper in setup, more flexible, easier to scale up and integrate, and yet they can’t take the entire market and become no-alternative solutions. Here is the answer – some people care about their security and prefer on-premises solutions as those that declare more security, even though it isn’t true by 100%. Nonetheless, on-premises systems do offer more control over infrastructure and data, which makes some people sleep better at night.

In the case of on-premises solutions, a company has to not only pay for software itself, but also for hardware and entire infrastructure – and yes, it does cost a fortune.

As you could guess, the main issue with on-premises solutions is in the financial aspect – they are very expensive to set up and maintain, as you build and run all the infrastructure on your own – so you take all costs related to it. Moreover, it also takes much time to get it all set – so most small and medium businesses just can’t afford it.

Cloud Computing

Cloud computing document management software uses absolutely different type of infrastructure location than in the case of on-premises software: while inbox solutions require you to set up all the infrastructure from scratch, cloud solutions use cloud environment to get it all set, as well as maintenance is provided by the vendor. You can also choose the subscription plan for your cloud solution, downgrading or upgrading when needed.

A cloud server makes use of virtual technology for hosting a company’s documents, applications, and data. No capital expenses are associated, data is backed up regularly by the cloud service provider, and the company needs to pay only for the resources it uses. If an enterprise is contemplating massive expansion on the global level, the cloud can help connect it with partners, businesses, and customers across the globe with minimal effort.

All your data, including documents, is hosted on the cloud server, which means you can get access from anywhere – with Internet access only. Data gets regular backups, and you pay no money for setup (in most cases), so you pay only the monthly fee. Cloud solutions are also more flexible in terms of scalability and integrations which are also provided by the vendor.

You also don’t have to worry about configuration – you provide vendor with technical specifications and he will get everything ready. Thus, you can start using your solution after 24 hours from the moment of purchase, while it is impossible to use on-premises solutions without spending weeks on their configuration.

Key Differences Between Cloud and On-Premises Solutions

Let’s check the difference between these two types of solutions in detail to avoid any confusion in the future, when you will be making your final decision.



All the infrastructure is built on company’s capacities, which requires professional IT team to provide set-up and maintenance, as well as ongoing updates and integrations.


You access the solution almost immediately through the Internet, which means you don’t have to worry about set-up or maintenance. For complicated business systems, you have to send technical specifications to vendor so he can provide set-up.



The expenses associated with an on-premises solution can soar significantly as the enterprise shoulders the responsibility of deploying the software and managing all related costs, including server hardware, space, and power consumption. On-premises solutions are typically regarded as both an acquisition and capital expense.


In the cloud computing model, the enterprise pays solely for the utilized resources. There are no upkeep or maintenance costs, and the pricing is contingent on the space and resources consumed. While cloud services may not necessarily be cheaper, as some providers incorporate those costs into their fees, they are treated as operational costs rather than capital costs. A lower initial price may ease the approval process.



On-premises solutions excel in affording companies complete control over their data and its management. Entities with stringent security requirements often opt for on-premises solutions, displaying hesitation to transition to the cloud for various reasons.


Choosing the cloud entails a company agreeing to share all its data with a third-party service provider, putting data privacy at immediate risk. Additionally, encryption keys and data reside with the service provider, meaning that in case of data loss or downtime, access to the data becomes inaccessible to the company, its employees, or users.



Industries handling sensitive information, such as finance, banking, and government organizations, demand high levels of security and privacy. While there are cloud services capable of meeting these requirements, a prevailing perception in many organizations leans towards on-premises environments being truly secure, blending cultural and perceptual considerations with information security concerns.


Cloud service providers pledge top-tier security levels, yet security remains a primary hurdle for enterprise cloud deployment. Numerous publicized cloud breaches have heightened concerns among IT departments globally. Security threats associated with the cloud range from the compromise of employee personal information, like login credentials, to the potential loss of more sensitive intellectual property.



Regardless of industry or sector, most companies operate under some form of regulatory control. Entities subject to such regulations often favor on-premises solutions, providing them continuous awareness of the location of their data.


Companies leveraging cloud solutions must scrutinize their service providers’ security models to ensure compliance with industry-specific regulations. A cloud provider must uphold the highest standards of security for customer, employee, and partner data.

Wrapping It Up: What to Choose?

By now, you likely have made a decision: opt for on-premises if prioritizing security, or choose the cloud for its cost-effectiveness and scalability.