Cloud-Based vs. On-Premise POS Software – Which is Best?

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When it comes time to select your company’s point of sale software (POS), one of the
first questions to ask is: the cloud or on-premise?

For the last few years, the cloud has been king. It’s modern, efficient, and convenient. But
that does not (yet) mean that on-premise systems are dead. Small businesses still have a
few reasons to use on-premise systems or some hybrid of both.

Almost every POS provider offers some form of cloud-deployment, but not all have
dropped on-premise packages altogether. While on-premise POSs ruled the roost until
recently, they lack the versatility and convenience of their modern age counterparts.
Cloud-based (or cloud-only) POSs are more plentiful than ever, and with good reason.
They are the future.

Nonetheless, when it comes to selecting a POS, your company has to go with the right fit
for its specific needs. Here are some key differences between the cloud and on-premise


The biggest difference in the two types of software is the deployment. The cloud is
hosted by the vendor’s server and can be accessed through any browser. On-premise
software is limited to company computers and servers that are, well, on-premises.


When running a business, cost efficiency and stretching every dollar is paramount, and
another significant difference in the two approaches is pricing. There is not necessarily a
“cheaper” option here. However, the payments are structured differently. The cloud
typically offers a lower monthly payment that you may be paying indefinitely, while the
on-premise option is a one-time license that initially comes at a higher price.

The drawback of paying one large lump sum up front is this: software changes (and ages)
rapidly. It may seem more economical to avoid paying every month to a system in the
cloud, but that usually includes valuable updates that keep your system current. Some on-
premise software solutions do offer updates; however, they are typically less seamless to
implement and may come with hidden fees.

In terms of running your business, it’s important to note that this seemingly small choice
impacts whether you put out more capital expenditure or operating expenditure. The
cloud will become a permanent part of your overhead. It’s not right though to assume that
on-premise doesn’t also have monthly fees that are often categorized as an annual
overhead. Those maintenance fees and updates can add up in a hurry.

Last, on pricing, the cloud solution is recommended for its low cost of joining. Many
young companies opt to sign up for a monthly subscription over the cost of installing and
maintaining on-premise solutions. In 2017, Forbes reported that in 2017 cloud systems
usage increased from 19% to 57% in just one year. Adoption of cloud-based systems is
almost certainly higher now.


Though cloud-based POSs seem unstoppable, one thing working against them is
skepticism regarding security. Just saying the term “the cloud” can make a potential
buyer feel anxious with negative connotations. However, cloud POSs have been proven
to be no less secure than on-premise POSs. As long as 2 years ago it was reliably reported
that cloud-based POSs were more secure than on-premise POSs.

Reputable cloud-based POSs have implemented stringent standards that dramatically
increase data security. Cloud-based POSs welcome third-party audits initiated by
potential buyers. Often, you can audit and crawl their site (or hire a company to do it for
you) before committing.


Cloud systems typically offer seamless mobile access. Many cloud POSs even have
integrated native apps. This versatility can raise questions of customizability. Some
would say that on-premise apps give a small business more wiggle room to cater to their
specific needs on their servers. But most companies prefer the freedom to go mobile. In
today’s world, going mobile is something businesses cannot live without. In response to
questions of customizability, cloud systems are striving to become more so. Native apps
are helping this to rapidly become a reality.

There are many moving parts to consider when deciding on your company’s POS
software. There seems to be no stopping the train of cloud-based POSs as they become
more responsive to companies’ needs. Selecting a cloud-based option like Aluvii offers
the freedom to pay as you go, update as you need, and take your work with you.

About Robert Brinton

An innovative entrepreneur, Robert leads by example. He encourages open dialogue, transparency and collaboration, inspiring us to disrupt and improve the amusement & leisure market by putting people first. When he’s not building companies he enjoys sports, boating, and time at home with his wife and kids.