On-Premises Vs Cloud PIM – Finding Your Best Fit

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By: Sagar Sharma

On-Premises Vs Cloud PIM - Finding Your Best Fit

Since you are exploring various types of PIM solutions, we assume that you are already acquainted with the concept of PIM and its potential to effectively address your challenges when implemented correctly, utilized efficiently, and aligned with your specific objectives. If you are in the market for a PIM solution, you are likely evaluating two main options: On-premises or Cloud PIM.

Although both options facilitate the streamlining of product information management for businesses, it is crucial to be aware of distinct differences between them. Over the past couple of years, numerous business leaders have embraced PIM solutions, while others have been slower to adopt them due to the difficulty in finding the right fit.

A pressing question for those in the decision-making process is whether to opt for an on-premises or cloud-based PIM. As businesses embark on their PIM journey, it is essential to keep their overarching business goals and objectives at the forefront.

Considerations should include what you aim to achieve and the timeframe for achieving it. Additionally, envisioning the future trajectory of the business plays a pivotal role.

The responses to these fundamental questions will significantly influence the choice between on-premises and cloud-based PIM solutions.

Organizations appear drawn to the PIM cloud as a potential lower-cost and lower-risk replacement for traditional PIM deployment. However, organizations must carefully examine both options to determine which is more flexible and advantageous.

If you are also in the process of gathering comprehensive information before reaching a final decision, stay with us. In this article, we will break down the distinctions between the two and assist you in identifying the option that best aligns with your needs.

What is On-Premises PIM?

On-premises PIM refers to the software that is physically installed and hosted on an organization’s premises or offices. When an organization decides to implement on-premises PIM, it purchases a license for the software and takes responsibility for installing it on its own servers.

The on-premises model offers full control over various aspects of PIM, including implementation, integration, upgrades, maintenance, and customizations. To ensure the smooth operation of the system, organizations typically require a dedicated IT team.

On-premises PIM systems come in two types: open-source and proprietary platforms. In an open-source system, users can access and modify the source code according to their business requirements. In a proprietary platform, the PIM vendor takes responsibility for adding new features and upgrades.

One of the key reasons organizations opt for on-premises PIM is enhanced security. All data is stored on the organization’s own servers, behind its firewall.

However, maintaining high-level security requires expertise, either from the vendor or in-house security professionals. While the implementation of on-premises PIM may take time, it provides the organization with complete control and customization to meet specific business needs.

The pricing model for on-premises PIM typically involves a one-time license fee, requiring a higher initial investment. However, operational costs tend to be lower in the long run, covering only updates, support, and training.

This approach allows organizations to prioritize departments, arrange employee training as needed, and have confidence in the security and local storage of their product data.

Advantages of On-Premises PIM

  • Control: Businesses have full control over their PIM data, including where it’s stored, who can access it, and how secure it is.
  • Customization: On-premises PIM offers greater flexibility and customization. Businesses can tailor the software to fit their specific needs, although this depends on the chosen solution.
  • Security: Data is stored on the company’s own servers, providing a higher level of security.
  • One-time Cost: On-premises PIM is usually a one-time purchase, meaning there are no ongoing subscription fees.

Disadvantages of On-Premises PIM:

  • Upfront Costs: Businesses need to make a significant upfront investment in purchasing software and setting up the necessary infrastructure, which can be challenging for early-stage businesses.
  • Maintenance: Companies are responsible for maintaining and upgrading the platform, which can be time-consuming and costly. Additionally, they often need to handle underlying infrastructure maintenance.
  • Scalability: On-premises PIM may not scale as easily as Cloud-based solutions. As businesses grow, they may need to invest in additional hardware and software.
  • Futureproofing: On-premises PIM solutions may lag behind in adapting to the fast-paced changes on the web. They may not be well-suited for new technologies that enhance user experiences and content delivery to various screens.

What is Cloud PIM?

Cloud PIM is a software solution hosted off-site by a third-party provider on the cloud. This means that the PIM software is not installed on a user’s physical premises but is accessible over the internet or through an application.

Once a license is purchased, the PIM software can be accessed from any location worldwide and at any time. Cloud-based PIM operates on a subscription model, where the provider makes the software available for use as long as the subscription is active.

The infrastructure for cloud PIM is typically supported by major cloud service providers such as Amazon Web Services (AWS) or Google. This eliminates the need for users to download, install, or manage the PIM solution on their devices.

Cloud PIM offers several advantages, including flexibility, scalability, and mobility. The subscription-based model, with predictable monthly or annual payments, is particularly appealing to small and middle-sized businesses.

This approach eliminates the need for companies to invest in their own infrastructure, hardware, or operational staff. Updates are handled automatically by the PIM provider, relieving users from concerns about equipment aging or software maintenance.

The deployment of cloud PIM is efficient, requiring less time than traditional on-premises solutions. It allows users to access product data without worrying about complex installation processes or compatibility issues.

Cloud PIM accommodates diverse business needs, from on-demand product data access to managing extensive product catalogs. Despite its popularity, it’s worth noting that some concerns about security persist within cloud PIM, even as efforts are made to address these issues.

Advantages of Cloud PIM

  • Speed: Cloud PIM deployment is faster because there’s less time spent on installation and setup. It gets you to market quickly.
  • Scalability: Cloud PIM is highly scalable, meaning it can adapt easily to businesses of all sizes, making it a strong choice.
  • Accessibility: Businesses can access Cloud PIM from anywhere with an internet connection, promoting remote collaboration and flexibility.
  • Security: Cloud PIM has a single API endpoint, reducing the risk of harmful attacks compared to on-premises solutions.
  • Cost: Cloud PIM is often less expensive upfront since businesses don’t have to handle infrastructure. Ongoing subscription fees can also be more manageable than maintaining On-Premises solutions.
  • Maintenance and Upgrades: The provider typically takes care of maintaining and upgrading Cloud PIM, reducing the workload and costs for businesses.
  • Frontend Agnostic: Cloud PIM avoids vendor/tech lockdowns, ensuring adaptability to evolving technologies.

Disadvantages of Cloud PIM

  • Control of Data: While Cloud PIM providers implement security measures, businesses may not have complete control over their data, relying on the provider’s security measures.
  • Customization: Cloud PIM solutions may not offer the same level of customization as On-Premises solutions since businesses are limited to the provider’s software and features.

Top Parameters to Select the Best PIM Solution for Your Business

Time-to-Market

In the fast-paced world of business, speed is crucial for success. The ability to meet customer demands quickly increases your chances of winning customers.

An easy-to-implement PIM solution plays a key role in getting to the market faster and offering the right products at the right time. Cloud PIM is a game-changer in speeding up time to market.

It minimizes deployment activities, allowing you to start working on your product data immediately, automate catalog creation, and run multiple marketing campaigns. The beauty of a cloud PIM system is that you don’t have to worry about hosting applications, maintaining systems, or handling security upgrades – the PIM vendor takes care of it all.

On the flip side, an on-premises PIM solution is a time-consuming process. Successfully implementing it requires your team to handle installation, hosting, configuration, and maintenance responsibilities.

While on-premises solutions offer high customization and data control, they demand a significant time investment in resource planning, system maintenance, and equipment setup.

Winner: Cloud PIM

Cost

Cloud deployment comes with a clear and significant cost advantage. Businesses not only enjoy lower setup costs, but maintenance costs are also notably reduced because the cloud environment is usually handled by the PIM provider.

The expense of Cloud deployment is often much less compared to the combined hardware and software costs of on-premises setups. The affordable subscription cost makes it easy for small and medium businesses (SMBs) to quickly expand their customer base.

Cloud allows them to access high-end PIM software without the heavy financial burden. On the flip side, on-premises PIM deployments typically demand substantial investments.

This includes expenses for software licensing, hardware, servers, installation, integration, maintenance, and system upgrades. Additionally, there are costs for hiring and onboarding resources, training internal staff, integrating the PIM platform with existing applications, migrating data from old systems, and establishing processes and custom workflows.

Beyond the initial upfront costs, on-premises PIM also involves ongoing expenses for continuous upgrades and new plug-ins to customize and keep your systems up to date with the latest customer demands.

Winner: Cloud PIM

Level of Control

When considering control in a PIM system, there are two essential aspects to think about: control over your data within the PIM system and control over the platform itself. If you want complete control over how you access, store, and manage product data, a cloud-based PIM may not be the best fit.

While a cloud PIM handles installation and configuration, much of the control remains with the provider. For example, if the provider introduces a new version or upgrades the system, it applies to all clients without individual consent, leaving certain issues beyond your control.

On the other hand, with on-premises implementation, you have full control over your PIM system. Since the application is hosted on your own servers, you have complete command over your product data and system design.

You can manage system versions and customize the application to align with your specific business needs. Having the PIM system physically on-site allows you to securely store information, swiftly retrieve data, address version concerns, and ultimately have better control over your product data.

Winner: On-Premises

Security

Data security and privacy are major concerns for any business owner when adopting a new software tool. Whether using on-premises or cloud PIM, it’s crucial to ensure that your PIM guarantees the complete security of your product information.

In a cloud-based PIM setup, the responsibility for securing your data rests with the PIM vendors. Most cloud PIM providers implement strong security measures, following widely accepted standards for platform security, network, operating systems, and infrastructure.

However, because everything operates in the cloud, you have limited control over the security in cloud PIM. This is why many businesses opt for on-premises PIM solutions, prioritizing higher security and reliability.

Enterprises dealing with extremely sensitive product information often choose on-premises PIM. With data stored on-site and nowhere else, you have greater control over maintaining the availability, confidentiality, and integrity of your data.

Winner: On-Premises

Scalability

Both on-premises and cloud PIM exhibit notable differences when it comes to scalability. Cloud PIM providers, investing in advanced technologies, offer higher scalability to enterprises, a crucial advantage in today’s highly competitive market.

Cloud PIM allows businesses to swiftly adapt to changes in demand caused by market fluctuations. It eliminates the need to hire extra resources or install new server capacity.

Instead, it provides a streamlined way to meet growing business needs and enhance time to market—a critical factor in today’s dynamic business landscape. On the flip side, on-premises PIM applications face challenges in scalability due to their reliance on physical servers.

Adding new systems when facing increased demands, and reverting to the original configuration when demand decreases, is not as straightforward. Therefore, regardless of the strength of your on-premises PIM systems, if they cannot scale according to changing customer demands, you risk missing out on potential opportunities.

Winner: Cloud PIM

Accessibility

The speed and ease of accessing data are crucial factors in determining digital business success and should not be underestimated. A cloud-based software application is accessible from anywhere and anytime, provided there is a secure internet connection.

This allows employees the freedom to work remotely or on the go, supporting around-the-clock operations for global expansion. However, connectivity issues can hinder data access, leading to frustration.

On the other hand, an on-premises PIM system stores data on your own servers, providing direct access to product information without relying on an internet connection. Yet, on-premises PIM has some restrictions on remote access, limiting the ability to access data at any time and from anywhere.

Essentially, access is possible only when the systems are functioning. Moreover, setting up a remote connection for employee access adds complexity to the implementation process.

Winner: Cloud PIM

ParameterOn-premises PIMCloud PIMWinner
Time-to-MarketInstallation, hosting, configuration, and maintenance is a time-consuming process.Minimized deployment activities speed time-to-marketCloud PIM
CostSoftware licensing, hardware, servers, installation, integration, maintenance, and system upgrades demand substantial investments.The affordable subscription cost of cloud deployment comes with a clear and significant cost advantageCloud PIM
Level of ControlTotal control over data and systemSome control; the provider manages certain aspects.On-premises PIM
SecurityGreater control over maintaining the confidentiality and integrity of dataLimited control over the security of dataOn-premises PIM
ScalabilityLimited scalability due to physical serversHigh scalability for quick adaptation to changing demandsCloud PIM
AccessibilityRestricted remote access; data accessible when systems are functioningAnywhere, anytime access with internet connection; supports remote workCloud PIM

On-premises Vs Cloud PIM: Which is Right for Your Business?

Choosing between on-premises and cloud PIM solutions is a critical decision for businesses aiming to streamline their product information management. Each option comes with its own set of advantages and considerations, and the right choice depends on the unique needs and priorities of your organization.

It’s crucial to align your choice with your organization’s goals, budget, and IT infrastructure. Evaluate factors like data control, scalability, accessibility, and overall cost to determine which solution best meets your business needs.

Say goodbye to data chaos and embrace the power of PIM/MDM to supercharge your business growth!