There are many different types of software and restaurant management technology that businesses use.. Two of the most common are on-premise and off-premise software.

But, what are the differences between the two options? What can we expect from restaurant management software hosted on-site or in the cloud? And which one is right for your restaurant or food-based business? Below is a breakdown of each type of software and their differences.

As you look to solutions for food costing software, restaurant delivery software, and even restaurant inventory management software–you’ll find yourself choosing from one or the other.

Key Takeaway: On-premise vs. off-premise software presents a challenge to restaurants choosing between expensive on-site hardware and cloud-based SaaS solutions.

What Is On-Premise?

On-premise is a type of software that is installed and run within your organization’s internal servers and computers. More often than not, the business must obtain a license if they wish to use the software. A license is also necessary to download the software to computers or servers.

Your business is then responsible for maintaining the POS hardware and software infrastructure required to run the application. This gives you more control over how the software is used and accessed.

On-premise software is often custom-built for a specific company, and it’s typically used for internal purposes. The most common use case for on-premise software is restaurant inventory software which is used in inventory tracking or managing payroll.

What Is Off-Premise?

Off-premise software is a type of software that is not installed on a company’s own servers. Instead, the company leases or rents the software from a third-party provider. Off-premise software can exist within cloud technology or as a SaaS model.

In both cases, you are not required to maintain the storage, hardware, and networks necessary to host the software. The provider of off-premise software typically owns and maintains this infrastructure and will provide training for their users on how to work with their systems.

These offerings remove much of the burden from an organization’s IT department, allowing them to focus on other technical and business needs. Off-premise software is, essentially, any software that’s already off-site–owned and operated in a location other than the businesses using it.

Off-premise software is accessible through remote servers and the internet. This software is often used with payment processing software and CRM systems.

What Is the Difference Between On-Premise and Off-Premise?

The main difference between these two software types is who is responsible for hosting and supporting the software. On-premise software is hosted in-house, while a third party hosts off-premise software such as online ordering software, for example.

On-premise software is installed and operated from the software customer’s own data center, while off-premise software is delivered as a service by the provider and accessed via the internet.

There are 10 key differences between on-premise and off-premise restaurant software that restaurant owners and operators should be aware of:

1. Form of Contract

With on-premise software, customers normally purchase a license to use the software outright. This means that they are responsible for all maintenance and upgrades.

Customers usually pay via monthly or annual subscription billing with off-premise software. This gives them access to the latest version of the software and frees them from worrying about maintenance and upgrades.

2. Deployment

On-premise software is installed on local servers or computers, while off-premise software is hosted on remote servers or in the cloud. On-premise deployment generally requires organizations to purchase, install, and maintain the necessary hardware and software infrastructure. In contrast, off-premise deployment options often allow for organizations to “rent” or “subscribe” to the required resources on a pay-as-you-go basis.

3. Cost Structure and Affordability

The upfront cost of on-premise software can be prohibitive for some organizations. Off-premise software is typically more affordable since customers only pay for what they use on a monthly or annual basis.

On-premise software is more expensive than off-premise software because of the need to purchase hardware and licenses, plus the ongoing costs of maintenance and support. Off-premise software is usually subscription based, so you’ll have recurring payments, but you’ll always know the price. This structure keeps payments from blowing up restaurant prime costs

4. Security and Control

On-premise software is generally more secure than off-premise software since it is hosted on the customer’s servers. However, regarding data security, off-site providers always use sophisticated technology to safeguard their consumers’ information, such as data encryption.

In addition, a secure payment system is one of the most important considerations for any business handling credit card payments and contactless payments , such as QR code payments. (See what is a QR code).

When you partner with the best payment gateway provider, you can be confident that your customer’s data is safe and secure. In addition, you can focus on running your business without worrying about compliance issues. Book a demo today to learn more about our restaurant payment technology solutions.

On-premise software is typically more compliant than off-premise because businesses that host their servers can ensure that they’re meeting all relevant security standards. However, since the use of such software lacks control for the business owner, it can be a challenge to abide by all PCI protocols. PCI compliance refers to the Payment Card Industry’s guidelines for protecting customer data and preventing fraud.

5. Accessibility

On-premise software can be challenging to access from remote locations. Off-premise software is more accessible since it can be accessed from any internet-connected device.

6. Mobility

On-premise software is not as mobile as off-premise software since it must be installed on each user’s computer. Off-premise software can be accessed from any internet-connected device, making it more convenient for users who are on the go.

7. Flexibility

On-premise software is often less flexible than off-premise software since it is designed to meet the customer’s specific needs. Off-premise software is typically more flexible and can be customized to meet the customer’s unique needs.

Restaurant POS integration and app integrations are excellent examples of this type of customization. By integrating your restaurant’s point of sale system with your off-premise software, you can add new functionality or integrate new or existing systems such as KDS systems. This integration provides many benefits for your business, including increased efficiency and accuracy and the ability to track and analyze sales data.

8. Scalability

On-premise software can be difficult to scale since each given customer’s hardware and infrastructure limit it. Off-premise software is typically more scalable since it is hosted in the cloud and can be easily scaled up or down to meet the customer’s needs. Off-premise software is more scalable than on-premise software because it can be easily expanded or contracted to meet changing needs.

9. Reliability

On-premise software is generally more reliable than off-premise software because it is not dependent on internet connectivity or the service provider’s availability. When an organization’s data and applications are stored on their servers, they have much more control over them and can ensure that they are well-maintained and always available. However, off-premise software can also be reliable if a reputable provider hosts it.

10. Maintenance

On-premise software is constantly in need of maintenance, meaning that frequent updates are a must. In turn, this can result in increasingly high costs and a lot of time. Off-premise software is typically more low-maintenance since the provider updates it regularly.

Off-premise software is often a better option for businesses. It's especially useful for those with few IT resources. Why? There's no in-house expense. Off-premise software is often easier to implement and use because it does not require this same technical expertise.

Frequently Asked Questions About On-Premise and Off-Premise

What is an example of off-premise?

One example of off-premise software is our own Revolution Ordering. Revolution Ordering offers restaurant automation tools and Artificial intelligence (AI) through IVR technology that streamlines your operation and helps you run your business more efficiently. If you’re looking for an off-premise software solution for your bar and restaurant, as well as your fully automated fast food restaurant, Revolution Ordering is a great option.

Not sure what AI in restaurants is? Take a quick read.

Revolution is the leader in off-premise solutions for hospitality and restaurant technology companies, with features like unified omnichannel ordering, Google ordering, live order monitoring, and voice ordering for restaurants. Plus, we can help you boost your business with demand creation and marketing services. Learn more about Revolution Ordering today.

What is an example of on-premise?

An example of on-premise software is an ERP system (see ERP meaning). Enterprise resource planning (ERP) systems are used by businesses to manage their core operations, such as accounting, restaurant inventory management, restaurant reservations, restaurant CRM, and supply chain management.

This type of software is typically installed on a company’s servers and accessed by employees through a private network.

Is SaaS on-premise or cloud-based??

When it comes to software as a service (SaaS), there is often confusion about whether it is deployed on-premise or via the cloud. Actually, SaaS can be both cloud-based and on-premise. However, each type is prone to having its own pros and cons.

What’s the difference between on-premise vs. off-premise for restaurants?

Two software types of restaurant POS systems are used in a quick service restaurant with self-ordering kiosks: on-premise vs off-premise. Here’s a quick overview of the POS system features between the two:

On-Premise POS

• Restaurant POS system or cafeteria POS is installed and housed within your premises
• Requires an up-front investment for hardware, software, and installation
• You’re responsible for all maintenance and updates
• Typically offers more customization options than cloud-based POS

Cloud-Based POS

• A third-party service provider hosts a restaurant POS system
• Usually involves a monthly subscription fee
• Service provider is responsible for all maintenance and updates
• Often easier to set up and use than on-premise POS

On-Premise vs Off-Premise: Which Is Best?

When you break down on-premise vs cloud solutions, what works for you will depend on the business. The best solution for your business depends on a number of factors, including your budget, data security needs, and compatibility with existing systems. Once you’ve considered all of these factors, you’ll be able to make an informed decision about on-premise vs. off-premise for your business.