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On-premises software and technology, also called on-prem, or on-premise, is housed within the physical location of an enterprise, rather than in the cloud or on hosted servers in a remote facility. On-premises software is also referred to as “shrink wrap software,” as compared to cloud-based software which is known as “software as a service” (SaaS).

On-prem software is the traditional form of enterprise and consumer applications, and typically requires each server and end user to have a license to use the software. Because these apps are housed within the data center of the enterprise, this model is more expensive than the cloud or hosted server models. On-prem software requires an investment in hardware, software licenses, and in-house IT staff, and the enterprise is responsible for the security and management of the software throughout its lifecycle.

However, all of these factors also make on-prem software more secure than cloud-hosted software, because the organization has full control of it. On-prem software is not subject to risks like loss of access during global or local Internet outages, security vulnerabilities that can be introduced by the provider’s data storage practices, privacy risks, and even the potential business failure of the SaaS provider.
Some organizations are adopting a hybrid approach where they run some workloads and apps on-premises, and host others on with cloud providers. This approach enables them to keep tight control of their most business-critical or privacy-sensitive apps on-premises, while taking advantage of the benefits of cloud hosting for less sensitive workloads and apps.