Cloud vs. Hosted Software vs. On Premises Software – What is the difference?

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One of the major choices facing any company evaluating ERP software is what type of deployment model you will choose.

Will you rely on a traditional on-premises, remotely hosted or cloud-based implementation?

What is the difference between the three and how does a company decide to choose one over the others?

First, it is important to have solid definitions for each deployment type.

Cloud vs. Hosted Software vs. On Premises Software

  1. On-Premise – With this type of implementation, you are responsible for everything related to the running of the software. You must purchase the network infrastructure, power, servers, operating system, database software, etc. You also need to maintain all of this to keep it running, safe and up to date. Once you purchase a license for the software from the vendor, such as a Microsoft Partner like CAL Business Solutions, the software is installed on your servers.
  2. Hosted – Like on-premises, you purchase licenses to use the software from a vendor, but rather than purchasing all of the hardware and infrastructure, you rent it from the vendor or another third-party provider. It is remotely-hosted, but you still own the software you purchased.
  3. Cloud – Using a Software-as-a-Service (Cloud) subscription model, you do not have to purchase any licenses or infrastructure. The only cost is an annual fee for the cloud services, which include servers, network and software all maintained by the cloud provider.

Deciding which of these options to choose largely depends on the state of your company and the direction you want your organization to take in the future.

  • If you already have the infrastructure in place and plan on keeping it, it might make sense to do an on-premises deployment. Or if you have limited internet connectivity, on-premises is still the best option.
  • If you find it difficult to maintain your infrastructure, a hosted solution will allow you to keep your current software and licenses. And you will be using someone else’s servers and network.
  • If you have neither infrastructure nor the money or desire to purchase any (or upgrade your current systems), the cloud just makes sense.

In the long term, the cloud might make the most sense for a new business since you will not have to buy upgrades or additional maintenance plans and it is a predictable monthly fee.

CAL Business Solutions works with Microsoft Dynamics GP and Acumatica. Both of these solutions can be deployed on premises, hosted or pure cloud.

If you are evaluating ERP options, contact CAL Business Solutions, we can help you decide which solution is best for you. Call us at 860-485-0910 x4 or

By CAL Business Solutions,

Our Story - Benefits of Moving From Dynamics GP to Acumatica

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