Positive Retail

Cloud vs On-premise POS software:

What is right for your business?

Cloud vs on-premise POS Software. There are two main types of POS software in the market: Cloud POS and on-premise POS. Each type has its benefits and drawbacks.

Before retailers acquire a POS system it’s important to research whether on-premises or cloud-based POS is suitable. This post aims to highlight the pros and cons of these options so retailers can make a balanced and informed decision for their business.

What is On-premise POS?

An On-Premise POS (AKA traditional POS) stores data on local servers and runs on a closed internal network.

What are the pros and cons of an on-premise POS?

Pros of an on-premise POS

Offline Capabilities

This retail software is installed on-premise and works without the internet. An offline database can be set up if the internal network fails. The software when it cannot connect to the main central database will connect to a local Database on the machine and continue to work.

Privacy and data security

Unlike cloud storage, which is more vulnerable to third parties and prying eyes, on-premises storage is completely restricted from anyone other than authorized personnel. On-premises servers are not accessible to those outside the network, as they are not storing the data online. This also gives end-users more control over their data.


An on-premise solution can be heavily customised and developed for unique business requirements.

Fixed Costs and Ownership  

There are fixed costs associated with on-premise solutions. Most licences are sold on a perpetual basis meaning a once-off payment and fixed after-sales fees. In comparison to cloud-based subscription models which are ongoing and more costly in the long run. 

Control of updates/upgrades

Software upgrades for on-premise solutions are manually implemented meaning the end user has control over whether to upgrade or not hence avoiding potential bugs or new functionality which will disrupt the business.


As the database is stored locally, on-premise POS software can be faster in comparison to cloud-based solutions.

Cons of an on-premise POS


Depending on the business size, an on-premise solution can take longer to set up and implement compared to cloud-based solutions.


Data backups are not automatic and must be managed by the end-user or end-user I.T.

Upfront costs

On-premise solutions require more powerful hardware and a longer installation/configuration time.

Therefore, upfront costs are higher than cloud-based counterparts.  

Mobile Access

Mobile access with on-premise solutions can be restrictive; because it does not rely on the internet and is installed locally you cannot access it anywhere. However, there are remoting tools which can be used to get around this.

Hardware Restrictions

Often on-Premise software vendors will only work with specific hardware specifications which are configured to their product.

Modern Mobile Suite

What is cloud-based POS?

A cloud POS is a web-based point-of-sale system that lets you process payments through the Internet

What are the pros and cons of cloud-based POS?

Pros of a cloud-based POS

Hardware Costs

Cloud-based Retail software is hardware independent, so retailers do not have to buy expensive hardware. Cloud solutions work through an internet browser, providing the device has access to the internet it will work on a PC, tablet, or even a phone.

Low upfront cost

Could-based software can run on inexpensive hardware and has monthly/yearly subscription options available. Therefore, upfront costs can be significantly lower.

Mobile Access

As cloud POS databases are stored in the cloud they can be accessed from anywhere at any time.


Information is generally (dependent on software) backed up automatically so there is no need to worry about backing up your data.


No software installation as the software is set up on the supplier side. This reduces the time need to get the solution up and running.

Cons of a cloud-based system

Reliance on the internet

If the Internet stops working, the software does not work. Some solutions have an “offline mode” however these are not to be relied upon.  A slow internet connection will impact the user’s experience using the system. When using a cloud solution, you should have a fast and reliable internet connection.

Restricted Support

Only the developer or vendor can resolve issues because the application is cloud-based. A big issue to one retailer may be a very small issue for a software provider and take time to get resolved. Similarly, many cloud-based solutions only offer in-app or online chat support. Retailers need to ensure that their support requirements are met.


Not every retail business is the same. Often retailers will have unique requirements from system customisation that is not possible with many cloud-based solutions.

Unpredictable Ongoing Costs

Retailers are at the mercy of ongoing subscription costs. Often pricing can only be locked in yearly.

Data Security

Whenever you implement a cloud retail solution, you are entrusting the management of your data to another party to manage and keep it secure. Whenever an outside party is trusted with your company data, you run the risk of unauthorized personnel accessing it. To avoid this, you’ll want to ask about the security practices and procedures of the cloud company and how they encrypt your data while it’s in transit and at rest.

Control of updates/upgrades

Upgrades are automatic with cloud-based software. Having no control of upgrades means that end users can potentially run into bugs or new functionality which disrupts their business.

In summary......

Cloud vs On-premise POS software, there are pros and cons to each, ultimately a retailer needs to know which fits the business requirements & budget best.

Deciphering which option is best for your business can be a difficult task. Positive Systems Solutions can offer retail technology consulting to assist retailers with software selection. Positive is the partner of choice for retailers wanting to maximise their commercial and customer engagement opportunities through trusted retail technology. Click here for more information on consulting.