On-premises vs. the cloud: what will move your company forward?

Comparison between on-premises and cloud software for companies - which solution drives digitalisation?

The choice between on-premises (often referred to as “on-premise”) and cloud software can be groundbreaking for your company in the long term. In this guide, we explain the differences between on-premise and cloud, the respective advantages and disadvantages and reveal why we believe that the future clearly lies in the cloud – but that on-premise solutions still make sense in some industries and situations.

1. Cloud solutions: The state-of-the-art complete package

Cloud software has established itself as the gold standard – and Gartner predicts it will become a business necessity for most companies by 2028.

Cloud software runs on external servers and is typically offered as:

  • SaaS – Software as a Service
  • IaaS – Infrastructure as a Service
  • PaaS – Platform as a Service

In all cases, the provider handles maintenance, updates, and security – no in-house servers or dedicated IT staff required. A private cloud option exists for companies that want online accessibility while hosting on their own servers.

On costs: the initial investment is generally lower than for on-premises, though recurring usage fees keep expenditure fairly constant. Overall spending depends on company size, requirements, and the security standards you need.

Advantages of cloud solutions:

  1. Cost-efficient: Usually low initial investment and flexible subscriptions

  2. Scalable: resources can be easily adapted to current requirements

  3. Accessible: Access from anywhere with an internet connection

  4. Automatically up to date: Always up to date without any effort on your part

  5. Secure to the highest standards: Benefit from the cloud providers’ teams of experts

  6. Reliable and supported: Tried-and-tested solutions with expert help included

  7. Disaster-proof: Data is geo-redundantly distributed across multiple, remote servers and can easily bridge outages

  8. Available: Modern software is usually only offered via the cloud.

advantages of cloud solutions

Challenges of cloud software:

1. internet connection required

2. data protection responsibility is transferred to the provider

3. individual customisation options limited

2. On-premises solutions: The traditional approach

On-premises software is installed and operated on a company’s own servers. Instead of a subscription, a licence is purchased for the software, which becomes the property of the company, and there may also be ongoing costs for maintenance and updates

On-premise solutions offer full control, but also require correspondingly more resources, effort and personal responsibility. An on-premise solution is therefore more suitable for companies with their own IT teams and strict data protection requirements that need complete control over their data and systems, for example in the areas of finance, healthcare and government organisations.

Advantages of on-premises solutions:

  1. Full control: over IT infrastructure, data and security guidelines

  2. Customised adaptations: Customised solutions for specific requirements

  3. One-off investment costs: Instead of ongoing fees (excluding maintenance and licence fees)

advantages of on premise solutions

Disadvantages of on-premises software:

1. high initial investment

2. expensive maintenance and operating costs

3. less flexibility

4. significantly slower implementation

3. on-premises vs. cloud computing: the most important differences

Feature
Cloud solution
On-premises solution
Costs
Flexible, usage-based, cost-cutting
High initial investment, ongoing maintenance costs
Scalability
High
Restricted
Maintenance and updates
Automatic and inclusive
Independent, resource-intensive
Access
Available online everywhere
Locally limited (exception VPN)
Data security
Very high standards thanks to expert teams
Dependent on own IT expertise
Implementation
Fast, within a few days
Complex, can take months

Which solution is suitable for whom?

The advantages of a cloud vs. an on-premise solution may outweigh the disadvantages, but in individual cases or in certain industries, hosting your own data and solutions on your own servers makes more sense.

Cloud solutions are ideal for:

  • Small and medium-sized enterprises (SMEs): Small and medium-sized enterprises often benefit directly from the cost efficiency and scalability of cloud CRM. Larger companies with their own IT departments and strict data protection requirements sometimes prefer on-premises solutions.

  • Companies with distributed teams: For companies that work remotely or have multiple locations, the cloud offers the advantage of worldwide access. This enables seamless collaboration and standardised customer service.

  • Growth-orientated companies: If your company is planning to grow rapidly, the cloud offers the flexibility and scalability you need. Resources can be adapted as required, which is particularly important during growth phases.

On-premises solutions can be useful for:

  • Companies in highly regulated industries: for example, when companies need to ensure full control due to specific compliance requirements

  • Large corporations with extensive IT resources: Those who already have a powerful and complex IT infrastructure, including specialists, can benefit from the customisation options of on-premise.

  • Companies with the highest security requirements: Companies such as those in the defence industry can guarantee on-premise control within the company and monitor the data there.

Cloud or on-premise? The future clearly lies in the cloud

The trend is unmistakable – and not only in customer service software. According to Gartner, more than 70% of enterprises will use industry cloud platforms to accelerate their business initiatives by 2027 – up from less than 15% in 2023. The benefits in terms of flexibility, scalability and innovation make cloud solutions the future-proof choice for most organisations.

Let Leafworks advise you

As experts in customer service, cloud development and CRM consulting with over 700 successful projects, we support you in choosing and implementing the optimal solution for your company. Specialising in Zendesk, we offer both cloud and on-premises integrations according to your needs.

Are you ready for the next step? Contact us now for a no-obligation consultation. Together, we’ll find the perfect solution to take your company into the digital future.

Contact Leafworks - your partner for future-proof cloud solutions

Book a free introductory appointment

Cloud or on-premises? The right solution for you

Leafworks supports both setups. Our integrations connect Zendesk with your existing systems – whether cloud or on-premises:

  • Connect Zendesk with systems like Salesforce Service Cloud
  • Automate ticket updates and reduce manual data entry
  • Free up your team to focus on service, not software management

With over 700 completed projects, we help companies find and implement the right solution. Get in touch for a no-obligation conversation.

Robert Cwicinski, Kundenservice + CX-Experte bei Leafworks

Robert Cwicinski

CRM expert

  • CRM
  • Automation
  • Integrations
  • Business Intelligence / BI
  • Zendesk
  • Digital Transformation
  • Custom MVPs
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