On Premise vs. Cloud Accounting Cost Comparison

Posted by Darren Pico on

Cloud computing has garnered a lot of hype in the technology world in recent years. Many innovative breakthroughs in cloud-based business applications have entered the fray, as well as those that target consumers. It appears that “the cloud” is the next big thing and many businesses are jumping at the opportunity to join in on it.

There are a variety of factors, however, that your business should look into before making the decisions on whether cloud computing is the right choice for you or not. We’ll take a look at what both have to offer as well as the cost comparison so that you can have a better understanding on what is best suited for your business.

Cloud Computing

The Difference Between Cloud and On Premise Solutions

On-premise solutions and cloud solutions have many differences between them. The biggest -and most obvious- difference between these two solutions is how you access them. On-premise solutions is pretty self explanatory, users will be able to access their information from their own computers. Cloud solutions, however, would be accessed via the internet, most likely hosted by a third-party vendor. Another large difference is the on-demand or “pay as you go” service model that traditional cloud services follow, as opposed to on-premise solutions upfront capital expenditures. Being able to count on-demand usage as a “utility” instead of a larger capital expenditure can be very beneficial for accounting purposes. Cloud solutions allows for a low cost/low entry point. However, this all depends on the size and needs of your business.

Let’s take a look at some of the differences that might not be as obvious as the ones listed above. For starters, cloud solution providers typically don’t have the time or extra bandwidth to work on providing fully customizable services for all their clients, unless a premium is paid. Another difference is that cloud offerings tend to be platform neutral, meaning that any browser can be used. Cloud solutions also allows for “rapid elasticity,” meaning that your business has the option to scale the resource usage up or down as is needed.

Advantages to Using Cloud Services

As mentioned above, a key advantage to using cloud services is the ability to cut costs on upfront and on-going IT expenses. On-premise solutions requires a large up front expenses, costs that include installation of servers, requiring an on-premise IT staff, maintenance, and many more. Cloud services on the other hand allows for low cost of entry, as well as the speed of implementation and setup.

On-premise vs Cloud

Disadvantages and limitations to Using Cloud Services

One of the biggest concerns when looking into using cloud services is security. Security has also been a hot topic these days, and for valid reasons. Does your business feel safe having all of your information and trade secrets floating out there somewhere in the internet? Another issue is the ability to migrate your company’s pre-existing processes into a cloud based one. It may not be that easy migrating your custom databases into a cloud based one. Depending on how valuable your information is, these disruptions may prove to be disastrous to your business. Outages are also not out of the equation. Although this can also happen on-premise, it never feels good when the problems are outside of your control.

Is There a Verdict Between On-premise vs. Cloud?

On-premise solutions and Cloud solutions both have their advantages and disadvantages. To say that one solution is better in all possible scenarios would be disingenuous. For some businesses, the long-term costs of an on-premise solution may actually be more affordable than a cloud-based solution. For others, the low start-up costs of implementing a cloud-based solution is too much to pass on. It all really depends on the needs of your business whether on-premise or a cloud-based solution is best for you.

For more information on cloud-based or on-premise solutions, contact us at MSI Technologies to find out which one is best suited for your business.

MSI Technologies, LLC. 1055 Parsippany Boulevard, Suite 205A, Parsippany, NJ 07054 | Tel: (973) 263-0080 | Fax: (973) 263-0082 | Email: info [@] msitechnologies.com

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