By now every firm, when discussing using software, has heard the term “in the cloud” and some could even differentiate between that and the phrase “on-premise” – but does every firm know the difference? If you don’t know, then what follows is the basic difference, and some of the ramifications of choosing one over the other.

In the Cloud

Simply stated, this means that your firm has decided to have your software and its related data (and what software you choose to be hosted could vary – more on that later) on a hosted server, accessible via the Internet. Your firm has no responsibility for updating, maintaining, or backing up that software (and usually, its related data.) If there is a disaster, the cloud host company is responsible for bringing your firm back up and running as quickly as possible. There is no concern about what server to purchase or upgrade, nor is there worry about storage space for data as that is all controlled by your Host provider. Your biggest concern is the bandwidth you have to your Internet host.


This is just another name for what firms have been doing for years. Your firm has purchased a server (or servers) and hosts the software required to run the firm on that hardware. Your firm (either someone you hired or someone you pay – a consultant (whose day job is to maintain his/her firm’s severs – and works on yours at night or on the weekend), your neighbor’s high-school senior son/daughter (just kidding, I hope) or an IT consulting firm specializing in providing those services to firms like yours, assumes the responsibility for everything related to the hardware and software: installation, system requirements, updates, security, backups: everything. You own it. The hardware, software and data is completely under your control and hosted by you in your offices.

Being In the Cloud

If you have chosen to go to the Cloud, then you have decided that some (say, just your practice management, or document management, or e-discovery) software is now hosted on the provider’s servers. They are responsible for installing, upgrading, backing up and securing both the software and the data. Your Cloud host may also be responsible for hosting your Windows desktops, in addition to the Windows servers and specific applications. (In this case you launch a program from your local computer’s desktop and run a desktop hosted on a cloud-based server, where all of your programs and data exist. Your local computer is nothing more than a means to get to the cloud.) This eliminates the need for a local vendor to do anything with local desktops except make sure they are running and connected to the Internet/network. (Yes, you will still need a basic network to connect all of your computers.)

You are comfortable with another company managing everything because you have vetted them thoroughly, and you feel that paying them to do something that is their area of expertise is a better decision than to hire and maintain that expertise in-house or via a vendor. You feel that your provider has a wider range of experience and resources than if you maintained a staff in-house/vendor situation.


If you have decided that you like to “own” your hardware and software; you have agreed to install, update, maintain, back up and secure both your firm’s hardware and software. Of course, all of the firm’s data that is created and stored by all of your firm’s programs is your responsibility as well. In the case of a disaster, you or someone you have paid (well, I hope) has implemented a plan that will restore any hardware/software/data destroyed by something like a fire (or a power surge, or a flood, or, well… you get the point.)

You are not comfortable with the thought of someone outside your firm being responsible for maintaining the hardware/software/data needed to run your firm. You feel that paying someone to come into your office, update the hardware and software, and secure and backup your data is a more preferred option than paying more (generally) to a Cloud provider.

Comparison of “In the Cloud” vs. “On-Premise”

In the Cloud


Less (finite) control – updates to software not in your control (see also “ability to customize”)

More control – updates installed as specified locally


Pay-as-you-go – you decide when to upgrade hardware – for example

No physical control of data

Possession is nine-tenths of the law!

Lower initial cost; higher long-term cost

Lower initial cost; lower long-term cost

Requires Internet Connection

Does NOT require Internet connection – but what firm doesn’t connect to the Internet on an almost constant basis?

Access from anywhere

Can access from anywhere, but requires additional cost/setup

Ability to customize software/setup may not be as flexible as on-premise configuration

Complete control of the ability to customize software/setup

Security is defined by hosting vendor

You define security protocols and implementation

As you can see from the above comparisons, there will always be a difference between choosing to host your firm’s data/software in the cloud, versus creating/maintaining your own physical network where your employees (or appointed vendor) is responsible for everything. Is there a “right” or “wrong” decision? Not as likely as NOT making a better decision based on your firm’s needs and wants.

Written by Jeff Stouse.

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