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  • Writer's pictureJack Arnston

Choosing Between a Cloud or Premised-Based System

As the use of document management systems becomes more mainstream, and organizations move to adopting the technology, a choice many people face is whether to install the system on their own servers or use a cloud-based solution. Sometimes these decisions are made due to a lack of internal support and resources or possibly a concern over the reliability of the internet. Some organizations have a philosophy that dictates the decision. If your company is considering the use of a document management system and you are weighing your options between cloud and premise-based solutions, here are some things to consider.

Cloud Systems

These systems continue to gain in popularity as more organizations are relying on the cloud for their line of business applications. Some of the obvious advantages of using the cloud are that your information is backed up, updates to software are included and you do not have to manage the implementation on your servers. Cloud systems also provide easy, yet secured access to information from nearly anywhere. This typically includes mobile apps for phones and tablets. For organizations that have more than one office, or remote users this can be a real advantage.

The virtual company has become more than just a fad. There are now whole companies that operate without a physical location; while many traditional brick and mortar organizations are finding it advantageous to have employees work out of their homes. Employees like it too, and often find it more flexible working environments to their benefit.

Remote workers still need access to mission critical applications such as document management workflow. Cloud solutions provide this type of access while maintaining the structure and security of a premised based system.

Another factor to consider is cost. Now not all cloud solutions are priced the same, but generally they all follow a similar principal. That is, you do not pay for the software upfront, but rather pay as you go. Like cell phones, there is typically a monthly charge for the software license, hosting fees, backups and software updates. For some organizations, paying monthly rather than having a large upfront capital expenditure is easier on the cast flow.

Premised Based

In-house or premise-based solutions are still the preference of many companies. Organizations that have deep IT resources often prefer to have complete control over the system and the database. This does require the company to have the proper server capacity to accommodate the system. It also requires them to have the database, typically SQL Server or Oracle. In the case of premised-based solutions, backups need to be administered on a regularly scheduled basis, normally nightly, and that updates need to be installed by the organization or their supporting reseller or manufacturer.

Upfront costs are greater with a premised-based solution as the software licenses are purchased upfront. The cost of servers and the database also needs to be factored in. Annual maintenance fees are also assessed which provides for updates to the software. When evaluating the long-term cost of ownership, however, prevised based solutions will typically cost less when evaluated over a five+ year period of time.

So, with the increase responsibilities of maintaining a premised based solution, along with the larger upfront costs, you might wonder why a company might choose this option. Well, there are a few advantages. The first is the speed of the system. A number of factors, including many that are outside your control, can slow the response of the system. For some, the speed difference is not a big deal, but for others a quick response time is critical. Another reason is access to the database. This may be used for integrating with other applications, assisting in workflows, report writing and use of analytical tools. Most cloud bases solutions will limit access to the database to retain the integrity and security of the system. Premised based solutions eliminate the barriers and provide much greater latitude when building a complex solution.

So, which system is the best?

Well that really depends on the needs of your organization. Our experience is that new systems are split evenly between cloud and premise. Typically, larger companies with more technical resources will bring the system in-house while small to mid-sized companies lean towards the cloud. Regardless of your needs there are excellent options for both types of systems.

Have you had any experiences with cloud or premised-based systems? Tell us your stories in the comments below! And if you like what you read, be sure to subscribe to our blog and monthly newsletter for more tips about document management.

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