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Should You Choose a Cloud or On-Premise eCommerce Platform

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Today’s question is not whether to have an online business or not; it is how to improve it and strengthen its hold in the market. 

The world is evolving rapidly, bringing conveniences that were once incomprehensible by the human mind. 

Self-driving cars? Prosthetics? Humanoids? Online stores?

Who knew they’d get to experience such amazing products? Technology has changed the game for the better. From transportation to shopping experiences, everything has undergone a significant change. 

One of the best products of this tech revolution is, indeed, eCommerce. Not only has it redefined the way consumers shop, but it also made retail business management easy and simple for business owners. While the rise of eCommerce does bring with it the highest levels of convenience, but to extract the complete benefits, online business owners need to develop smart strategies to not only build a stronghold in the market but also to manage their operations better. 

If you’ve recently hopped on the bandwagon, you need to make sure you leverage the best tech solutions to take your eCommerce to peaks of success. 

It brings us to a very important question, “is it better to choose a cloud or on-premise eCommerce platform?”

Before we dive deep into the comparison, we must first understand each option in detail. 

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Understanding On-Premise eCommerce Platforms

As its name suggests, on-premise eCommerce platforms require a physical location with proper infrastructure. Using such platforms require servers that are present on the premises. When a setup involves physical infrastructure, ignoring the hefty monetary investment is not an option. 

From the initial setup to the upkeep of the business, retailers need to invest a huge amount of money to ensure the smooth functioning of their eCommerce business. But with this setup, business owners can be at peace as their data is in their in-house server and not at high risks of cyber-attack. Moreover, to use such on-premise systems, businesses need to purchase a license or copy the software they are using. That makes it possible for companies to enjoy better protection of their data. 

Understanding Cloud eCommerce Platform

Unlike an on-premise eCommerce setup, cloud-based platforms don’t require physical infrastructure and in-house servers. Instead of having their setup, companies that use cloud technology have a third-party host that houses the servers and the data. It also includes integrating virtual technology to host the company’s applications off-site. Without much additional monetary investment, companies can ensure regular backing up of data. 

This setup is ideal for companies looking to expand and grow their business on a very large scale. The best thing about such setups is that they allow business owners to establish a vast network of customers and partners anywhere. 

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Cloud Vs. On-Premise: The Comparison

We have separately discussed both on-premise and cloud-based eCommerce setups, and we can closely compare the two. By the end of this comparison, you might understand which eCommerce setup is the most suitable for your business. 

An obvious difference between the two is the hosting of the servers. The company has to hold its servers and manage its data in an on-premise setup. While in a cloud-based setup, a company connects with a third party to host its servers. 

Setup and Maintenance Cost

The first factor under consideration is the cost of setting up and maintaining the system. As discussed above, to deploy an on-premise eCommerce business, you need to have in-house servers and a properly maintained infrastructure. That means you need to invest heavily into not only the setup but also in its regular maintenance. In addition to this, a business must hire a proper IT team to ensure that everything functions at its best. 

When it comes to cloud-based setups, you don’t need to set up or maintain physical infrastructure. As everything is in the cloud, you can carry out the operations remotely. A third-party host maintains the servers, eliminating the need to invest heavily into maintenance and setup. 


Another factor that distinguishes an on-premise setup from a cloud-based is its company’s control. When the servers and the data are managed on the premises, it allows the business owners to control the happenings completely. It is a plus for companies that operate in strict industries about maintaining their privacy. 

On the other hand, businesses cannot access their data in a cloud-based setup when there’s an emergency. There is a huge question mark on the ownership of the data in this case. Even though the data is generated through a company, it doesn’t have much control. 

Safety and Security

When it comes to the safety and security of data, an on-premise setup is the best option. All those data-sensitive organizations such as banks and government bodies choose to have their servers in-house. The privacy such a system offers is worth acknowledging. In contrast, privacy and security remain some of the biggest flaws in a cloud-based system. The security threats in such a system are real and can put sensitive data at huge risk.

Ability to Scale-up and Scale-Down

One of the best things about cloud-based eCommerce setups is the capability to scale up or down based on the company’s growth, requirements, and overall usage. It is possible because, in such setups, the servers are hosted by a third party. Companies operating on a cloud-based eCommerce platform don’t need a huge IT team for maintenance.

It is not easy to scale up or scale down based on company requirements in an on-premise eCommerce system. 

The Focus of the IT Team

 eCommerce businesses that choose an on-premise setup must employ a proper IT team. Unfortunately, the primary job of this team is to maintain the servers and focus on their upkeep. These professionals are unable to focus on any strategic initiatives. 

On the other hand, when an eCommerce company employs a cloud-based setup, they don’t need a huge IT team to maintain the setup. Instead, their IT staff is responsible for developing strategic initiatives to improve the business. 

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The Verdict

Both on-premise and cloud-based eCommerce setups come with unique features, making them a wise choice for specific businesses. When it’s about safety and security, there’s no better option than an on-premise eCommerce setup. But if it’s a company focusing primarily on its growth and is on its way to scaling up, cloud-based is the perfect option. Also, integrating a NetSuite eCommerce solution will only make things better. 

You can partner with Folio3, a Certified Oracle NetSuite Alliance Partner, for NetSuite integration, implementation, and customization!

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