The Difference between Cloud-Based and On-Premise Point of Sale Systems


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Written by McCall Robison | June 26th, 2019
McCall is a Content Marketing Strategist for Best Company. Graduated in English with an emphasis in Professional & Technical Writing, her interests include reading, writing, and hanging out with her cat.

When deciding on the right POS system for you, it is important to understand the difference between the two main categories that POS systems fall under. The two categories are Cloud-Based POS systems and On-Premise POS systems. Each has their pros and cons, so it is essential to research them in order to find the one that works best for you.

Cloud-based systems

Cloud-based systems function like other POS systems, but you manage them through the Internet, making them easily manageable and accessible. They are compatible with other point of sale systems, which includes hardware such as cash registers and printers. Data is stored externally on a cloud database. Deployment of such a system usually only takes a few days.

On-premise systems

On-premise systems are the more traditional POS systems that are required to be installed on-site through your computer system, and the data is stored internally on local servers. Deployment of on-premise systems usually takes a couple of weeks.


On-premise systems have to be installed on-site, while cloud-based systems can be installed remotely, given that they run completely online. This is one of the main reasons that on-premise software takes quite a bit longer to implement than cloud-based software.

Pricing comparison

On-premise software can range anywhere from $3,000-$50,000 per year. Cloud-based software on the other hand can range anywhere from $600-$10,000 per year. On-premise systems require more on-site assistance and maintenance, while cloud-based systems are easily managed through the Internet, making them more cost-efficient when compared to on-premise software. Consequently, small businesses usually prefer cloud-based software.

Upfront fees

In addition to being less expensive, cloud-based software also requires less expensive upfront fees. On-premise systems require additional upfront compensation because software installation is done on-site and is more labor intensive. Cloud-based software installation is done remotely, therefore it is significantly less expensive.


Because on-premise systems are installed on-site, maintenance updates also have to take place on-site. For cloud-based systems, updates either take place automatically by the provider, or they can easily be done manually from a remote location. Some on-premise users prefer the hands-on implementation because they have more control over what is happening within their system.


Accessing the data within your POS software is more difficult with on-premise systems. On-premise software requires on-site accessibility, making it difficult to keep up on data if you are not on site. However, cloud-based software is done remotely through the Internet or on mobile devices, so accessing data is possible as long as you have Wi-Fi. This also proves to be a benefit in the case of a power outage at your business; cloud-based systems will be easily accessible during a power outage, while on-premise systems will have to wait for power to turn back on before accessing all the data. However, you can access on-premise systems without Internet access, which can prove to be beneficial.

Point of sale services will have different options for cloud-based as well as on-premise software, but this way you have a better idea of what the two are and what they have to offer. While there is no right or wrong decision, there is a system that will work best for you based on your situation. If you want to learn more about the top POS companies, you can find that here.

The Top Point of Sale Companies

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#1 Best POS System chevron_right
9.9 Overall Score
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#2 LightSpeed chevron_right
9.6 Overall Score
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#3 TouchBistro chevron_right
9.1 Overall Score

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