SaaS eCommerce

The Difference Between a Cloud-Based eCommerce Platform & On-Premises 

Updated April 15  |  6 min read
Key Takeaways
  • The main difference between a cloud and an on-premises platform for an online store is where the software is hosted and managed. Cloud eCommerce platforms are hosted and managed by the provider in the cloud, accessed through the internet, and paid for on a subscription basis.
  • On-premises eCommerce platforms, on the other hand, are installed and run on servers located within a business's premises, and managed by the business's IT team.
  • A cloud eCommerce platform offers greater scalability, flexibility, and accessibility, while on-premises solutions offer more control and security for an eCommerce store.
  • Cloud platforms typically have lower upfront costs and require less IT infrastructure, while an on-premises eCommerce solution may require more maintenance and higher upfront costs.
A user-friendly digital commerce interface and tools for search engines can be added to both on-prem and cloud platforms.

Until fairly recently, the only available option for hosting an eCommerce platform for online shopping was to build one on-premises, 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 on the benefits of cloud computing and on-premises platforms to host eCommerce software, including the eCommerce functionality each provides to reach the sales growth you want.

An eCommerce website can thrive on both on-prem and cloud hosting.

The Difference Between Cloud-Based and On-Premises eCommerce Platforms

Where will your digital commerce store live? Let's take a look at why you might choose one over the other for an eCommerce store.

What Is a Cloud-Based eCommerce Platform?

Similarly to storing your photos on the cloud, cloud hosting your eCommerce platform implies no physical existence, at least not within your business's premises. 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 payment plan. Cloud-based platforms go hand-in-hand with SaaS (software as a service) licensing to allow for data accessibility.

A digital commerce solution can help an e-Commerce business with customer satisfaction.

What Is an On-Premises eCommerce Platform?

Contrary to the cloud-based option, an on-premises (sometimes called on-premise or on-prem) platform requires the existence of a server within the premise of your business, ideally at the headquarters.

Hosting your eCommerce solution on-premises 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.

Third-party cloud service is an important part of both cloud and on-prem headless commerce options.

What Are the Benefits & Disadvantages of Different Platforms?

The best eCommerce stores on platforms can be found on both on-premises and cloud, so why would an online business choose one over the other? Let's take a look.

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 own eCommerce website. OK, this is an exaggeration, but cloud-based options are highly preferred by business owners without a solid IT background, or the funds to support an IT team.

Using a cloud-based or SaaS eCommerce platform for eCommerce sites is quite easy and fast, and generally cheaper than building a platform from scratch, as the hard work has already been done.

Nowadays there are several companies offering cloud-based 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 Do Some Still Prefer On-Premises Platforms?

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

When 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 no set list of features to choose from, you can create your own product.

Another major advantage of hosting an eCommerce platform on-premises is the performance of the platform. Depending on the competency of the people responsible for building and deploying 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.

Cloud eCommerce can help with search engine optimization and data security.

General Rules When Shopping for a Suitable Platform

When finding a platform for your digital commerce needs, what should an eCommerce business watch out for both cloud and on-premises?

What Do You Need to Watch Out for in Cloud-Based Platform Options?

While there are benefits of cloud hosting, it's important to talk about one place where they can fail: 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 (now a customer of 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.

Headless commerce cloud options offer a flexible platform.

What Do You Need to Watch Out for in On-Premises Platform Options?

Cost is one of the two major disadvantages of hosting enterprise eCommerce platforms on-premises. 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 provider, budgeting for the initially substantial cost of the on-premises option might be worth it, especially given its other advantages.

Another big issue that on-premises 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 platform is quite easy, as all you need to do is purchase a larger plan.

A digital commerce platform can improve the customer experience for large enterprises.

Should You Go For On-Premises or Cloud eCommerce Platforms?

The honest answer is: It depends!

Both options offer several advantages for eCommerce websites, but also hide culprits that could make their use potentially cumbersome. It all depends on what the company is looking for, the available resources, and the time, effort, and money available for investment. It also depends on what 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 customer data storage expansion in one click.

Digital commerce cloud for an online business.

Where Will You Keep Your Online Store?

Choosing an on-premises platform means granting 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-premises platform, whereas smaller companies that offer a limited range of products, might find a cloud-based eCommerce platform more suited.

Clarity would love to talk to you about your needs for eCommerce on cloud servers for your own online store. We offer a complimentary discovery session so get in touch for a no-hassle plan on how you should move forward.

Get your own e-Commerce platform and web hosting.



A cloud eCommerce platform is a software-as-a-service (SaaS) solution that allows an online store to create and manage its online stores in the cloud. This means that all aspects of eCommerce, including website hosting, payment processing, catalog management, and customer data storage, are handled by the platform and accessed through the internet.

What are the benefits of cloud computing for an a store on an enterprise eCommerce platform? These platforms are flexible, scalable, and customizable, making them a popular choice for businesses of all sizes. They also offer advanced features such as marketing automation, sales and marketing strategy, analytics, and integrations with other tools to streamline eCommerce operations and improve the customer experience.


Cloud computing offers numerous benefits to e-Commerce stores. Cloud services provides scalable resources, allowing stores to effortlessly adjust their computing power and storage needs to meet demand fluctuations, ensuring seamless customer experiences even during peak times.

This agility also extends to cost efficiency, as businesses only pay for the resources they use. Also, cloud services offer robust security measures, safeguarding sensitive customer data and transactions.

Cloud technology facilitates global reach by enabling content delivery networks (CDNs) for fast-loading web pages across different regions. This improves user experience and can lead to higher conversion rates.

Cloud technology offers a range of tools and services for data analytics, allowing an eCommerce stores to gain valuable insights into customer behavior, preferences, and market trends. This, in turn, helps in making informed decisions regarding supply management, marketing strategy, and customer engagement efforts.

A cloud-based eCommerce platform empowers online stores with the flexibility, security, and analytical capabilities needed to thrive in the dynamic online marketplace.


Some popular cloud platforms for eCommerce include Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). These platforms offer a range of services such as storage, computing power, and database management, as well as tools for building and managing eCommerce websites and applications.

Ultimately, the choice of eCommerce on cloud servers for your online store should be based on a careful evaluation of the business's unique requirements and the capabilities of each until you find the best eCommerce platform for your needs.


An example of a cloud eCommerce platform is Shopify. It is a fully hosted SaaS (software as a service) solution that allows an eCommerce business to create and manage online stores without the need for any technical expertise or infrastructure. The platform provides a range of features such as website design templates, inventory management, payment processing, and shipping integrations for online shopping.

Shopify is highly customizable, with a large app store offering a wide range of add-ons and integrations. It is also scalable, making it suitable for eCommerce businesses of all sizes, from small startups to large enterprises. Shopify is a popular choice among businesses, with over a million businesses in more than 175 countries using the platform.


As of 2021, the most used eCommerce platform is WooCommerce, a free and open-source plugin for WordPress websites. WooCommerce powers over 28% of all online stores, making it the most popular platform in the world. It is highly customizable, with a wide range of plugins and themes available to tailor the platform to specific needs. Other popular eCommerce platforms include Shopify, Magento, and BigCommerce.

These platforms are also widely used and offer a range of features and pricing options to suit businesses of different sizes and needs. Ultimately, the choice of an eCommerce platform for digital commerce depends on the specific requirements and goals of the business.


While it is possible to sell online without an eCommerce platform, using a platform can make the process much easier and more efficient. platforms provide a range of features that simplify online selling, such as eCommerce website hosting, payment processing, and stock management. They also offer tools for creating and customizing an online store, marketing and advertising, and analytics for tracking performance.

Using an eCommerce platform can save time and resources, allowing businesses to focus on other important aspects of their operations. However, the choice of whether to use a platform ultimately depends on the specific needs and goals of the business.


Yes, most eCommerce platforms allow for integration with social channels such as Facebook, Instagram, and Pinterest. This integration allows businesses to sell products directly on social media platforms, providing an additional sales channel and reaching a wider audience. The integration typically involves setting up a product catalog on the social media platform and syncing it with the platform.

This allows seamless management of products and orders across different channels. Social media integration can also provide valuable data on customer behavior and preferences, allowing businesses to improve their marketing and sales strategies.


Selling through more than one cloud eCommerce platform can be done through a process called multi-channel selling. To start, businesses can create accounts on multiple platforms such as Amazon, eBay, and Walmart, and set up their online stores. They can then use an inventory management system that can sync their inventory and orders across different platforms. This ensures that they have real-time visibility of inventory and can avoid overselling.

Also, businesses can use a centralized order management system that aggregates orders from different channels and enables them to process and fulfill orders from one platform. Using a multi-channel selling strategy can help businesses reach a wider audience and increase their sales opportunities.


Yes, many eCommerce websites and corresponding platform allow for integration with an Amazon store. This integration can be done through Amazon Marketplace, which allows businesses to sell their products on Amazon alongside other third-party sellers. To set up the integration, businesses need to create a seller account on Amazon Marketplace and connect it to their eCommerce platform.

This allows eCommerce businesses to take advantage of automatic syncing of product information, inventory levels, and order fulfillment between the two platforms. Integrating with Amazon can provide businesses with access to a large customer base, increase their brand visibility, and boost their sales. It can also provide valuable data on customer behavior and preferences, allowing businesses to improve their marketing strategies.


No, Salesforce Commerce Cloud is a cloud-based digital commerce platform and cannot be installed on-premises. As a SaaS solution, Commerce Cloud is hosted and managed by Salesforce in the cloud, and accessed through the internet by its customers. This allows for greater scalability, flexibility, and accessibility, as businesses can easily manage their online stores from anywhere with an internet connection.

However, this also means that businesses do not have full control over the hosting environment—as they might with on-premise platforms—and must rely on the provider for maintenance and updates. Overall, Salesforce Commerce Cloud is a popular choice for businesses looking for a scalable and customizable cloud-based eCommerce solution, but it can't be housed on-premise.

Yes, Adobe Commerce (formerly known as Magento Commerce) does offer an on-premises version called Adobe Commerce On-premises. This on-prem service allows businesses to host and manage the platform on their own servers or a third-party hosting service. It provides more control over the hosting environment and infrastructure, which can be important for some businesses with specific requirements or compliance needs.

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Stephen Beer is a Content Writer at Clarity Ventures and has written about various tech industries for nearly a decade. He is determined to demystify HIPAA, integration, enterpise SEO, and eCommerce with easy-to-read, easy-to-understand articles to help businesses make the best decisions.