Cloud vs On-Premise: Which is better for your manufacturing site?

Cloud vs On-Premise

The need to Digitalize your Manufacturing

Digitization is among the greatest thing that has ever happened on earth. It has influenced every sector of human civilization. Digital technologies have increased the productivity of humans. The capacity of production of goods has never been better before technology happened. 

The manufacturing sector is among the industry where technology has completely revolutionized. The world’s most valuable product is no longer oil but data. Technology allows for huge data sharing in the manufacturing sector. 

Smart manufacturing involves the integration of digital technologies in manufacturing. These include aspects of Artificial intelligence, computerized sensors, Internet of things, among others. 

These digital technologies require computerized infrastructure. The software comes with the need for licenses to use. Other devices come with a need for shared networks and management. 

Depending on the sizes, manufacturing units can be complex. They could involve a lot of interaction between machines and operators. One common question that arises is whether to go for on-premise or cloud technologies. 

What is on-premise management?

This refers to the physical internal management of digital technologies. Software licenses are stored in the physical premises. This option of management of digital technologies requires a huge investment in infrastructure. 

You will need space and internal arrangements for the security of the gadgets. Data sharing and digital technologies require internal management. It allows data sharing within the institution. It is the traditional option that has long been used in management. 

What is cloud management?

Cloud services (SaaS) have been a great breakthrough to the capacity of digital spaces. A virtual data management system allows users to create store all their data in space. For cloud services (SaaS), space and physical infrastructure is not a big requirement. 

The security of the data is provided from the firewalls and other techniques. Users can create private spaces in the cloud to add security measures to their data. 

Cloud services (SaaS) allow for data sharing between allowed users. It centralizes the management of data. Users can also send unlimited data to the cloud for storage and management. 

It is ideal for huge data investments. Manufacturing units that adopt smart technologies are turning to cloud services. Centralized management and data sharing are the main attraction. 

To answer the question of which is better for your manufacturing unit, we need to evaluate the benefits of each option. 

“No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.” 

Warren Buffet

What are the advantages for on-premise option?

The on-premise data management option comes with some benefits. Many people used it in the past before the reality of cloud services (SaaS) happened. Among the benefits are: 

1. Easy to modify

The on-premise data management provides the data infrastructure with the human managers. Therefore, it is easy to modify them at their will. 

2. Easy to customize

With data in the hands of the managers, they can customize the infrastructure. Customization serves the specific requirement of the manufacturing units. 

3. It gives peace of mind to data security

Having your data secured internally sounds safer. Data managers can add end-to-end security measures. It is to ensure their most sensitive information is not leaked. 

4. Compliance to some government control

Some governments require on-premise monitoring of the digital infrastructure. Therefore, the on-premise option of data management complies with such regulations. 

5. You get to know your costs before investment

The licensing fees on the software are upfront with an on-premise option. You can calculate all your costs before investing. 

What are the advantages of cloud services?

Cloud data management comes with a variety of benefits. The cloud services industry was expected to reach a growth of $332.2 billion in 2021. You are sure to keep at par with competitors when investing in the option. Some of the advantages include: 

1. Automates software updates

With cloud services (SaaS), you do not have to update your software manually. The system automatically updates the software. 

2. Provides better support

One thing driving many manufacturers to cloud services is flexibility. You get maximum support with your data management. You only pay for what you need with the software and other digital services. 

3. Flexible costs

Cloud service (SaaS) allows you to pay in bits for what you need. Companies lose much in paying for the licenses and software as a whole. With cloud services, you can tailor your fees to what you need at the moment. 

4. Easier management of data

Cloud services (SaaS) allow for data sharing in real-time without physical maintenance. Every user can send and access data from the cloud at any moment. The data is automated and can receive data at any time. 

5. Accessibility from anywhere

Cloud services (SaaS) allow users to access the database from any location. Users can thus work at home confidently and get things done. The limitation of access to data in the office limits workers’ productivity. 

6. Licensing flexibility

Cloud services (SaaS) allow users to access the database from any location. Users can thus work at home confidently and get things done. The limitation of access to data in the office limits workers’ productivity. 

Axacute is a cloud-based inventory and production system designed to help small manufacturing companies obtain greater visibility to their warehouse and shop floor operations.

Suggested Read: What is Axacute? 

What are the differences between on-premise and cloud services?

1. Deployment

On-premise requires the physical deployment of the infrastructure to the users. However, the cloud-hosted servers allow for unlimited access by the users. Maintenance is done by the host service providers. 

2. Control

On-premise data managers handle the controls to accessibility. It provides 100% privacy to the database. However, the cloud services offer data encryption and security to a third-party validator. Therefore, shared ownership creates risks for data management. 

3. Security

With both options, there is never a guarantee of data security. However, the on-premise option may sound better with security. Access control is shared with a few managers. Therefore, it is easy to maintain security with on-premise management. 

Cloud services (SaaS) still offer maximum security to data. However, the idea of information being in the cloud creates a risk to hawkers and cybercrimes. Nonetheless, in both, stringent measures are required to secure data. 

4. Cost

Both investments come with a cost. The on-premise option requires added cost to the storage and the digital infrastructure. Physical security services are also required to safeguard the devices. The upfront fees to the licenses and software maintenance also add to the cost. 

Cloud services  (SaaS) have limited costs. The flexibility of the licensing and other fees make it a lesser burden. You can pay for what you need with automation maintenance. It reduces the physical management associated costs. 

5. Compliance

Both options are compliant with regulations. However, the on-premise option allows for physical monitoring and inspection. Thus, becoming better to comply with regulators. However, the government is developing regulatory guidelines for cloud services. Choose the service provider that is compliant with your country’s regulations.  

With this information, you should make informed decisions on what your manufacturing requires. Analyze the size of your unit and determine what option best suits you. 

The On-Premise option would suit your manufacturing if:

  • The security of your unit is nothing to risk about. The on-premise offers maximum security on data, the reason big manufacturers chose it. 
  • You want to manage your software and hardware internally.
  • Your manufacturing unit is customized to many independent sections. 

The Cloud (SaaS) option would suit your manufacturing if:

  • You are continuously in the changeover of machines from the facility. 
  • You have in-consistent productivity and a desire to scale up.
  • You want remote monitoring of the machines. The remote access makes many manufacturers choose the option from the work home schedules with COVID-19 pandemic. 
  • You prefer having the management of the data done by the service provider. If you are walking away from the assignment of maintenance, cloud services would best suit you.


There has never been a better time to upgrade your manufacturing unit than today. You need to evaluate and determine which option suits your unit. The on-premise will give you a chance to physically maintain the infrastructure. You secure your data internally. However, cloud services give you rest from physical maintenance and software upgrades. Various service providers evaluate manufacturing units and advise best. If you find it hard to choose which option suits you, the service providers will do the assignment. 

Talk to us. Would you like to learn more about Axacute?

Fill in your details and we will get back to you shortly.