Top 3 Key Differences Between On-Premise and Cloud based Ecommerce Platforms
The rise of eCommerce has revolutionized the retail industry significantly. The e-commerce platform plays a significant role in the success of selling products and services online. Most of the companies find it challenging to decide whether to choose an on-premise or an e-commerce platform. In this article, we’ll discuss the differences between on-premise and cloud-based e-commerce platforms to help you make a better decision to choose your e-commerce platform.
Before dig in deeper, let’s try to discover to understand the approaches of both these eCommerce platforms:
1. On-premise eCommerce Platform
The on-premise software is installed locally on the company’s hardware system (computers and servers). It typically involves more substantial upfront capital investments, including costs of servers, infrastructure, and facilities needed to manage the software and licensed software. Once the software is installed, its ongoing additional expenses include hardware maintenance, data storage, security, data backups, and more. Another cost overhead is investing in the technical team to assemble and make the software function. It is a traditional way of deploying any software.
2. Cloud-based eCommerce Platform
The cloud e-commerce platform is provided as a service. The vendor hosts and manages all of the software and its accompanying customer data in the Internet cloud. The vendor is responsible for upgrades distribution, bug fixes, data security, ongoing support & maintenance, and developing innovative features and enhancements. It results in the minimal upfront investment as you implement the software to your requirements and works on a pay-as-you-go subscription model. Hence, adopting a cloud-based e-commerce platform allows your staff to focus on what matters most – developing strategic initiatives to help you grow and expand your business.
Now that we’ve defined both the e-commerce platforms, it’s time to look at some of the critical factors that differentiate on-premise and cloud-based eCommerce platforms.
Let’s look at how on-premise and cloud eCommerce solutions stack up in terms of costs, scalability, and time to value.
• Upgrades and Implementation Costs
Once an organization opts for an on-premise e-commerce platform, it requires a significant upfront investment that companies are often not prepared for; costs such as purchasing hardware, hosting, software licensing, and resources to implement the solution. Moreover, integrating Data Center is very expensive as it takes up valuable floor space, requires proper heating & cooling, additional equipment, and dedicated staff to support and maintain it. And then comes those dreaded upgrade cycles which prove a considerable disruption to the business.
• Scalability and Agility
Scalability refers to a system’s capacity to easily handle an increase in the load of the website traffic. The on-premise e-commerce platform limits the growth of the business because of its limitation to system upgrades. The traditional on-premise solution is relatively brittle and challenging to customize, whereas a cloud-based eCommerce platform has been built with e-commerce as a focus. It has in-built capabilities to cater to the ever-changing diverse requirements of eCommerce. It offers a clear advantage by making it easier and quicker to deploy and evolve with time. You do not need to worry about the IT infrastructure as it is taken care of by the vendor. It enables you to respond to the new market opportunities quickly. A cloud-based eCommerce platform provides the flexibility to handle and manage more customers as per your business growth.
• Ease of Access
The cloud-based e-commerce platforms offer a turnkey solution that is ready to use and are much easier to access. It is quick to set up a business without having to worry about purchasing software, upgrading your hardware, and other infrastructure. And, the on-premise eCommerce platform requires to set up things from scratch. Moreover, it is a time-consuming process to find various third-party vendors to complete the internal setup.
The hosting for eCommerce platform plays an essential role in the performance of the business. With this, we hope that you got a clear understanding of the cloud-based and on-premise eCommerce platforms.
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