Pricing Wars: Cloud vs On-Premise Solutions

One of the key differences between the cloud and on-prem solutions is how they are priced.

In general, the cloud software is priced under a monthly or annual subscription, with supplementary recurring fees for training, support and updates. Cloud software has a low-cost of entry when compared to the substantial upfront continuous license fee (which is the case with on-prem). This factor has contributed heavily to its widespread adoption.

One study states that;

Meanwhile, On-premise software is usually priced under a one-time continuous license fee. This is usually based on the number of concurrent users and the size of the company. There are recurrent charges for support, training and updates.

On-prem solutions can be considered as a capital expenditure, like a single large investment up-front. While, cloud-based systems are generally considered as operating expenditure (Op-ex) like a supplementary overhead cost that the company will continue to pay as per usage.

Therefore, what will you choose ?

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