Cloud vs On-Premise ERP

Cloud ERP: what you get

Cloud (SaaS) ERP runs in the vendor's infrastructure. You pay a monthly subscription. Updates happen automatically. You access it from any device with a browser. You don't need a server room, backup systems, or IT staff to maintain it.

For small to mid-size shops (under 100 employees), cloud ERP is almost always the right choice. The cost is predictable (monthly subscription), you're always on the latest version, and you don't need to hire IT people to keep the lights on.

On-premise ERP: when it makes sense

On-premise makes sense when: (1) you have regulatory requirements that mandate data stays on your physical premises (some defense contracts require this), (2) you have unreliable internet and can't afford downtime when the connection drops, (3) you already have IT infrastructure and staff to maintain it, or (4) you're large enough (200+ employees) that the total cost of ownership favors owning vs renting.

The tradeoff: on-premise gives you more control but costs significantly more upfront ($50K-$500K+ for software and implementation), requires ongoing IT maintenance, and upgrades are your responsibility.

The hybrid middle ground

Some vendors offer hybrid deployment — the core system runs in the cloud but certain data or functions can be kept local. This is increasingly common for shops that need cloud convenience but have specific data residency requirements.

For most job shops under 50 employees, the answer is straightforward: cloud. The cost is lower, the maintenance is zero, and you can focus on making parts instead of managing servers.