What is the Difference Between a Cloud vs On-Premise eCommerce Platform?

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The Difference between Cloud-Based and On-Premise eCommerce platforms

Until recently the only available option for hosting an eCommerce platform was to build one on-premise, relying on an in-house IT team, a server and hope that its storage capacity will not betray you. In the past decade or so, cloud-based eCommerce platforms became a hit, offering the option of someone else doing the “heavy-lifting” jobs and allowing you to easily create an online shop for your business. Both options are still widely used, as both have certain advantages and disadvantages. This article will shed some light into the differences between cloud-based and on-premise eCommerce platforms.

What is a Cloud-Based eCommerce Platform?

Similarly to storing your photos on the cloud, hosting your eCommerce platform on a cloud implies no physical existence, at least not within your business’s premise. Cloud-based platforms offer “off-the-shelve” solutions to easily set-up an e-shop, where you choose the options that represent your brand best from an array of pre-made products, and the host of the cloud takes care of the rest. There is no need to worry about maintenance, storage expansion, security, updates, or anything else, the only thing required is being prompt with the paying plan. Cloud-based platforms go hand-in-hand with SaaS (Software as a Service) licensing to allow for data accessibility.

What is an On-Premise eCommerce Platform?

Contrary to the cloud-based option, an on-premise platform requires the existence of a server within the premise of your business, ideally at the headquarters. Hosting an eCommerce platform on-premise indicates a usually hefty investment of money and time, in order to acquire a suitable server, build the platform, as well as keep it constantly updated and well-maintained. In return though, you have full control and ownership of your product.

WHICH ARE THE ADVANTAGES OF THE TWO ECOMMERCE PLATFORM OPTIONS?

What are the Benefits & Disadvantages of Different Platforms?

Why are Cloud-Based Platforms so popular?

As mentioned earlier, one of the main advantages of cloud-based platforms is that everything is pre-made for you, you only need to choose the font of your website. OK, this is an exaggeration, but cloud-based options are highly preferred by business owners without a solid IT background, of the funds to support an IT team. Using a cloud-based or SaaS platform is quite easy and fast, and generally cheaper than building a platform from scratch, as the hard work has already been done.

Furthermore, nowadays there are several companies offering cloud-based platform options, targeting different business sectors with their specially developed characteristics. Some popular names are Shopify, Volusion, Magento 2 (recently renamed to Magento Commerce (Cloud) or Magento Enterprise Cloud Edition), NetSuite, Big Cartel, BigCommerce, and Goodsie, without this list being exhaustive.

Another important advantage of cloud-based platforms is their easy scalability. If your business is rising and you want to expand your services, or there is increased traffic for other reasons, there is no need to worry, cloud-based platforms offer the option of expandable data storage, to keep your business flourishing, without any unforeseen thorns.

Why are On-Premise Platforms still preferred?

Despite cloud-based platforms being an easy and quick option eCommerce, many businesses are still loyal to the good, old, on-premise model. Having your platform developed and hosted on-premise allows for full control, without third-party companies being involved and possibly compromising security or data visibility.

No-one else is imposing rules, you can customize your product as much as you want, until you are fully content with it. Building a platform means that there is not a set list of features to choose from, you can create your own product.

Another major advantage of hosting an eCommerce platform on-premise is the performance of the platform. Depending on the competency of the people responsible to build and deploy the platform, performance can be much better compared to that of cloud-based platforms. Adding to that is the ability to incorporate updates or proceed with maintenance whenever you want, not relying on the maintenance schedule decided by the host company as in the case of cloud-based platforms.

WHICH ARE THE DISADVANTAGES OF THE TWO ECOMMERCE PLATFORM OPTIONS?

General Rules When Shopping for a Suitable Platform

What Do You Need to Watch Out For In Cloud-Based Platform Options? It has been briefly mentioned already, but now we will elaborate on it. Security. Many business owners prefer to be solely responsible for the security of their data (including the valuable data of their customers), so handing over permission to someone else to handle their business is a no-no.

Another disadvantage of cloud-based platforms is the absence of total control from the business owner end (who now is a customer for the cloud hosting company). There are options for personalization, but there are not infinite. You can access your platform from everywhere (using a stable internet connection), but you will not be the only one.

What Do You Need To Watch Out For In On-Premise Platform Options? Cost is one of the two major disadvantages of hosting an eCommerce platform on-premise. You will need a strong IT team to develop, deploy, and maintain the platform, and that translates to human resources, time and inevitably, cost, on top of the cost of the server. Depending on the balance between sustaining a team and paying a monthly fee to a cloud-based platform provider, budgeting for the initially substantial cost of the on-premise option might be worth it, especially given its other advantages.

Another big issue that on-premise platforms face is the difficulty in scalability. If data storage runs out due to increased traffic, business expansion, or anything else, it can be tricky to scale up, and there might be required to even purchase a new server. In comparison, scaling up a cloud-based platform is quite easy, as all you need to do is purchase a larger plan.

IS THERE A VERDICT BETWEEN THE TWO?

Should You Go For a Cloud-Based or An On-Premise eCommerce Platform?

The honest answer is: It depends! Both options offer several advantages, but also hide culprits that could make their use potentially cumbersome. It all depends on what the company is looking for, the available resources, the time, effort and money available for invest. It also depends on one might be willing to sacrifice. For example, going for a cloud-based solution might compromise the available options to choose from, but it can allow for data storage expansion at one click. Choosing an on-premise platform means grants sole responsibility for data and information security, which can be a blessing and a curse at the same time. Usually, big, established companies and companies with B2B clientele tend to choose an on-premise platform, whereas smaller companies which offer a limited range of products, might find a cloud-based eCommerce platform more suited.

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