What is On-Premise?
On-premise (also called on-prem) means that hardware and software are physically installed and managed at the organisation’s own location — for example, in a server room or data centre within the factory or office.
This contrasts with cloud-based solutions, where data and systems are hosted externally (e.g. on Microsoft Azure, AWS, Google Cloud).
🧱 Characteristics of on-premise systems
| Feature | Description |
|---|---|
| Physical location | Equipment and systems are located on the company’s premises |
| Management | Fully under the control of the organisation’s own IT or OT teams |
| Network access | Only accessible via the internal network (sometimes with VPN) |
| Licensing model | Often a one-off purchase plus a maintenance contract |
| Data security | The organisation is itself responsible for backups and security |
| Delay (Latency) | Very low — suitable for Real-time industrial applications |
🏭 Why do companies choose on-premise?
- Greater control over data (important for sensitive or business-critical processes)
- Low Latency: ideal for Real-time applications such as SCADA, MES or Motion Control
- No dependency on an internet connection
- Regulatory compliance (e.g. in pharmaceuticals, defence, energy)
🔄 Comparison: On-Premise vs. Cloud
| Aspect | On-Premise | Cloud |
|---|---|---|
| Hosting location | On the organisation’s own premises | External data centre |
| Management | In-house IT/OT team | Cloud provider |
| Cost model | One-off investment | Monthly or annual costs |
| Scalability | Limited, requires manual expansion | Flexible and automatic |
| Internet required? | No (locally available) | Yes (for access and processing) |
| Updates | Manual, by in-house team | Automatic, by the provider |
🧠 Examples of on-premise applications
- SCADA systems that monitor processes 24/7
- MES software running on local servers in the factory
- ERP systems with custom interfaces and integrations
- Database servers for local storage of production data
📌 In summary
On-premise means running your software and infrastructure locally and keeping it fully under in-house management. This provides maximum control and low Latency, but also requires more internal responsibility for maintenance and security.