When searching for accounting software, one major consideration will be if you want a cloud solution or an on-premises solution. One of the most obvious differences is how users access the software.
On-premises software is exactly that – software installed on your computers. Cloud solutions are accessed through the internet and are usually hosted by a third-party vendor.
Another difference is the on-demand or “pay as you go” pricing model primarily used by cloud-based software vendors, versus the more traditional upfront capital expenditure for most on-premises software installations.
Note: Cougar Mountain Software offers pay-as-you-go pricing for on-premises software.
A Few More Characteristics of Cloud vs. On-Premises Software
Here are two important features of cloud and on-premises offerings.
Software Installation Site
As we previously mentioned, the biggest difference between cloud-based and on-premises applications is where each is housed. With on-premises installations, applications and servers are all stored on-site. With cloud-based solutions, the software is housed in the cloud infrastructure at a third party’s remote data center. On-premises software requires on-site server management; cloud-based software outsources server responsibilities to a third party. There are positives and negatives to both of these scenarios. For example, cooling equipment, maintenance, system upgrades and even power delivery tools all fall onto the shoulders of the company where the actual servers are housed. However having control over all of those aspects means you have more control over how your system performs.
Bandwidth refers to the speed and success of data transfer. When businesses find they don’t have enough bandwidth to support the amount of applications and data moving through the computing environment, they need to spend money to solve the problem. In a cloud based system, a business owner would have to pay the third party host to increase the capacity and size of the hosting environment. For on-premises solutions, owners might have to upgrade their computer systems and add servers.
Instances Where On-Premises Software Is Preferred
Many businesses can benefit from on-premises software installations. Here are eight instances where this solution is preferred.
- When your company focuses on long-term costs, prefers perpetual license models, and the overall total cost-of-ownership are similar for both cloud-based and on-premises software.
- When your business requires internal IT support, your application and data are local, and you plan for local system administration.
- When your business’s system integration requires several interfaces to other applications, your integrations are complex and evolving, and usually bi-directional and dynamic.
- When your business does not have cloud applications in place, ERP and CRM applications are already installed on-premises, and your executive team sees cloud applications as a risk to the business.
- When you have a good history with application upgrades, you already have an established upgrade process, and you have the right skills to manage on-premises software and servers.
- When you prefer to have your applications customized to your business, your business or industry is highly unique, and you have an aptitude or personnel to sustain customizations.
- When your upgrades are localized, your users are centralized in few locations, and you have high-quality servers.
- When you prefer capital expense budgets and plan on a larger financial impact in year one.
Choosing the right accounting software for your small business will depend on a variety of elements and considerations unique to your business.
If you want to learn more about how your company will benefit from the use of integrated accounting software and if on-premises or cloud implementation is right for you, feel free to contact the team at Cougar Mountain Software. They can provide information about solutions for small business accounting software and can guide you through selection, installation, and training.
Call (800) 388-3038 to speak with a business and accounting expert.