Cloud vs On-premise CAFM software: How to choose

What does cloud CAFM software mean?

With cloud software, the vendor hosts the system. Your data sits in their data centre. Your team signs in through a web browser or a mobile app. You pay a regular subscription, usually per user or per site.

You do not install anything on your own servers. Updates happen on the vendor’s side, so everyone is on the same version. Backups, uptime and security patches are the vendor’s job.

This is how most facility management software is sold today.

What does on-premise CAFM software mean?

With on-premise software, the system runs on servers your organisation owns. That might be a server room in your building or space you rent in a data centre. Your IT team installs it, maintains it and backs it up.

You usually buy a licence rather than a subscription. Some vendors charge a one-off fee plus a yearly support charge. Others licence it yearly.

Your data never leaves infrastructure you control. That is the main reason organisations choose this route.

Cloud versus On-premise: the main differences

Treat this as a general picture. Every vendor packages things differently, so check the detail against any product you are considering.

When cloud is the better choice

Cloud tends to fit when:

• You have no in-house IT team, or a small one already stretched
• You manage several sites and need one system everyone can reach
• Your technicians work from mobile devices across different locations
• You want to start quickly without a hardware purchase
• Your budget works better as a running cost than a large one-off spend
• You expect the number of users or sites to change over time

For most private sector FM teams, cloud is the practical default. The setup burden is lower and the vendor carries the work of keeping the system running.

When on-premise is the better choice

The clearest case is data residency. Some government bodies, defence sites, healthcare providers and financial institutions have to keep operational data inside their own infrastructure, or at least inside a specific country. Where that is a legal or contractual requirement, it settles the question before anything else is considered.

Other situations where on-premise makes sense:

• The site is air-gapped or has restricted network access by design, which is common at secure facilities
• Internet at the site drops often, and a system that depends on it would frustrate the team
• You already own suitable servers and have IT staff to run them, which changes the cost comparison
• Your security team needs to run its own testing, control patching, and hold the data itself

There is a trade-off worth stating plainly. On-premise gives you control, and it also gives you responsibility. Backups, uptime, patching and disaster recovery become your problem. If nobody in your organisation owns that work, the system will drift out of date, and an out-of-date system is not more secure than a maintained cloud one.

What about hybrid?

Some vendors offer a middle option. The usual shape is core data held on your servers while certain functions run in the cloud, or a private cloud instance dedicated to you rather than shared infrastructure.

Hybrid can work, but the term is used loosely. If a vendor offers it, ask exactly which parts sit where, and get the answer in writing. “Hybrid” on a brochure can mean anything from a genuinely split architecture to standard cloud hosting with a different label.

Questions to ask before you decide

Ask your own organisation first:

1. Do we have a written data residency or data sovereignty requirement? If yes, what exactly does it say?
2. Who would own server maintenance, backups and patching if we went on-premise?
3. How reliable is internet access at every site we manage?
4. Does our budget favour a subscription or a capital purchase?

Then ask the vendor:

1. Do you offer both deployment models, or only one?
2. If on-premise, is it the full product or a reduced version? Which features are missing?
3. Do the mobile apps work with an on-premise deployment, and what does that need?
4. Who is responsible for updates, and how often are they released?
5. If cloud, where are the data centres located, and can you commit to a specific country?
6. What happens to our data if we end the contract? In what format do we get it back?
7. What is the total cost over five years under each model, including support and hardware?

Question two matters more than people expect. Some vendors offer on-premise but with a smaller feature set, because parts of the product depend on cloud services. AI features in particular often need cloud computing power. Ask directly rather than assuming the two versions match.

Common mistakes

Picking on-premise for security reasons alone. A well-run cloud system is often more secure than a self-hosted one that nobody patches. Security depends on how the system is managed, not only on where it sits.

Picking cloud without checking your data rules. Some organisations find out about the requirement halfway through a rollout. Ask your legal or compliance team before you shortlist vendors, not after.

Comparing subscription cost against licence cost and stopping there. The comparison is not finished until you add servers, IT time, backups and support on the on-premise side.

Treating the decision as permanent. Many vendors can move you between models later, though it takes effort. Ask whether that is possible before you sign.

Frequently asked questions

Is cloud CAFM software secure?

It can be, and often is, but it depends on the vendor. Ask where data is stored, how it is encrypted, who can access it, and what certifications the vendor holds. A vendor that cannot answer those clearly is the concern, not cloud as a model.

Can I switch from cloud to on-premise later?

Sometimes. It depends on whether the vendor supports both models and how they handle data migration. Ask before you buy rather than assuming it will be possible.

Which is cheaper?

It depends on your situation and the time period you look at. Cloud usually costs less to start. On-premise can cost less over many years if you already have servers and IT staff. Build a five-year comparison including all costs on both sides.

Do I need internet access for on-premise CAFM software?

Not for users on the local network. You need it if technicians or managers want to reach the system from outside the building, which normally means setting up a VPN or similar.

What is the difference between on-premise and self-hosted?

They usually mean the same thing. Some people use self-hosted to include running the software on infrastructure you rent from a cloud provider, which is a middle position. If the distinction matters, ask the vendor what they mean by the term.

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New to this category? What is CAFM software covers the basics. For terms used across facility management, see the FM glossary.