On-Premise ERP System…Still Value?

On-Premise ERP System

Growing storage needs, automatic software updates, ease of use, disaster recovery, effective communication, flexibility, and limitless access are key reasons why cloud computing has exploded over the past 4-5 years.  Investments in cloud-based ERP systems has increased more than any other investment in the IT sector, especially compared to an on-premise ERP system. These investments are expected to continue increasing for the foreseeable future. 

Before you think about ditching an on-premise ERP system and switching to a cloud-based system, consider the negative side too. The biggest issues related to cloud are; security, performance, customization, and reliability.  

Let’s try looking at this from a different perspective. It is like choosing between buying your own building versus renting a workspace for your business. You’ll have to decide whether you want to have total control over your environment, or you want to rely on a landlord to deliver what your business needs. 

Key On-Premise ERP System Features


Providers of cloud-based systems will never acknowledge this, but there are security issues involved. For example, making sure the relevant cloud cyber security settings are configured. During a recent breach, the culprit was found to have incorrectly configured cloud security settings. A lot of companies still do not feel comfortable outsourcing their network or control of its defenses. With an on-premise ERP system, you are the master of your own universe.  


Cloud providers will point out the high level of customization their software offers. The truth is a one-size-fits-all system can never fit as comfortably as a software solution written specifically for your firm.  When selecting on-premise, the provider will consider your individual needs, circumstances, business modal, and build it as planned.  Once completed, the keys are in your hands to remodel as you wish.


With automated backups of critical data, cloud services seem clearly superior. The downside with backups of critical company data being stored off-site, is always the risk of it being accessed by a competitor or criminal.  In case of a systems failure when you urgently need to upload important information, you will have to rely on an internet connection to access the data. A slow connection can make this a cumbersome process, and if the connection is lost halfway through the exercise, you are likely to lose your data and need to start over.  Plus, cloud service providers’ servers are scattered across many geographical locations and you can suffer latency issues. Even worse, customers can have the same delays making their experience a bad one.

Sharing is not always caring

Cloud-based systems share hardware, software, and services with all other users at the same time.  Not all of them will behave impeccably. For example, if someone starts hogging a lot of bandwidth or resources it can have a detrimental effect on all their neighbors, resulting in poor performance and even system downtime.  


There are still several reasons why choosing an on-premise ERP system could be the best option. Most decision makers will  security is the top issue. For other businesses the decision will depend on reliability, performance or customization.  

Businesses that require maximum security and an abundance of flexibility are still choosing on-premise ERP systems.  Typically, they are in the defense, or other industries of national security and importance.

Despite all these features and improvements on-premise systems have continued to make, cloud-based systems are clearly starting to outshine and become the default choice.  A cloud-based system is definitely no longer a trend but is here to stay. In the next 5-10 years, we expect cloud to take over 90% of the market.

What do you think will happen in the next 5-10 years, will cloud take over completely?
Let us know here ⇓


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