Cloud vs. on-premise ERP software: how do they differ?

Among the different types of enterprise resource planning systems (ERP software), the solutions that operate in the cloud and those hosted on the company's servers, better known as on-premise, stand out. Both meet their main objective, which is to simplify processes in the various business areas and centralize the information derived from them. However, they have important differences that are worth knowing.

What is a cloud ERP system?

In a nutshell, an ERP integrates into a single platform management modules from different areas of a company, simplifying processes and facilitating information flows to optimize decision making. When we say it is in the cloud, we mean that we access the system under the Software as a Service model, better known as SaaS, for its acronym in English. In this service model, a specialized provider develops the software, runs it on a network of remote servers connected to the Internet and takes care of maintenance and updates, in order to offer it to users on a subscription basis. Some common examples are email and office tools, such as Microsoft Office 365 and Defontana, one of the best ERP in the cloud. The main advantage is that we do not have to invest in underlying infrastructure, middleware, licensing or software development. The provider is the one who makes this investment and is responsible for the security of the information and availability of the system.

What is local ERP software (hosted on company servers)?

Also known as On Premise applications, they refer to those applications installed and executed in the company's servers and IT infrastructure. In this case, we must implement our own development or acquire a software license, and we are responsible for ensuring the security, availability and administration of the system, while we are responsible for the maintenance of the hardware infrastructure.

Differences between cloud and on-premise ERP systems

The main difference between the two types of systems lies in where they are hosted and run. Cloud ERP operates on remote servers connected to the Internet, while on-premises ERP operates on the company's IT infrastructure.

Then there are other differences that are worth considering when making a decision:

Cloud ERP is cheaper than on-premises, because we don't invest in hardware and software infrastructure. We only pay rent per use.

The ERP in the cloud is not our property (it belongs to the provider), while the local system is our property, as well as the servers where it runs.

The cloud software can be accessed from any device with an Internet connection. With local ERP, access is usually restricted to computers connected to the company's internal network.

The best cloud ERP is usually more scalable than on-premises ERP.

In the digital age we live in, cloud software tends to be more convenient for most organizations. Hence, companies use an average of 110 SaaS solutions, according to figures presented by Finances Online. In the case of enterprise resource systems, the best option of this type is Defontana ERP. The Defontana ERP solution allows you to manage all the business areas of your company, regardless of its size or industry. In addition, it easily integrates with other solutions, such as CRM, human resources and digital signature.