March 2, 2021 Last updated March 2nd, 2021 83 Reads share

On-Premise vs. Cloud – Which POS Development Solution Is Right for Your Business?

Image Credit: DepositPhotos

If you own a retail store or a restaurant and consider a new POS system, you’ll have to choose between a cloud-based POS and an on-premise solution. Each point-of-sale system has its pros and cons, so you need to know the features that align with your business needs to arrive at the best POS development model.

What is On-Premise POS Software?

Also known as a traditional POS system, this on-premise solution stores all your data on local servers. It runs on your internal network & so; you can only access your information on your in-office desktops.

What is Cloud-Based POS Software?

This solution stores information remotely on an online server. It brings you the convenience of any time, anywhere access to your data. All you need is a reliable internet connection.

The Pros of On-Premise POS

On-premise POS development offers some definite benefits over a cloud-based solution. Its three key benefits are:

  1. A Wide Range of Features: Legacy POS solutions are certainly here to stay in the foreseeable future. So, you can deploy them without a second thought. They will continue to offer distinct advantages to businesses, including data security, efficient inventory management, error-free accounting & seamless payment processing.
  2. Touchscreen Capabilities: A traditional solution typically comes with a 15-inch touch screen. These bulky systems are stable and easy-to-use. They are suitable for use in coffee shops, retail outlets, fine-dining restaurants and fast-food chains.
  3. Easy to Deploy: A legacy POS solution runs on your company’s internal network. So, it integrates specific capabilities like backup drives, adequate space, and dedicated data servers. Brands with a vast IT infrastructure can consider deploying a traditional POS system and take advantage of their existing devices and hardware.

The Cons of On-Premise POS

Like any other solution, traditional POS development is not without downsides and, they are:

  1. Legacy Systems are not Optimized for Smartphones: It is one of the most significant drawbacks of developing & deploying an on-premise POS system. It lacks the flexibility of remote access. It would help if you had a dedicated individual at the terminal to process transactions & access data.
  2. Costly to Deploy: The deployment of a legacy POS system for a retail store or a restaurant can be a costly investment. This is because you need compatible hardware to run the system. It is not recommended for small businesses running on a tight budget.

The Pros of Cloud-based POS

The combination of cloud technology and innovative tools has myriad benefits to offer like:

  1. Remote Access to Data: The most significant benefit of a cloud-based POS system is that it allows easy access to your data. It means that you can stay on top of everything and supervise your store without being present on the floor. It also keeps you updated on the daily tasks you perform at your retail store or restaurant.
  2. Efficient Inventory Management: Inventory management and sales associated issues have always hampered smooth operations. SMEs lose valuable time trying to find and fix errors that adversely impact their potential sales and growth. A cloud-based POS does not need manual data entry & it minimizes the scope of manual errors. This, in turn, improves growth prospects and increases sales.
  3. Subscription-based License: You can implement a cloud-based POS solution at a monthly subscription fee and a minimal upfront cost. It is an ideal solution for SMEs that want to keep their initial investments to the minimum. The monthly subscription includes latest features, periodic updates and data backup.
  4. Scalability: With a cloud-based POS, you have the flexibility to increase or downsize the number of devices your business needs. It is ideally recommended for businesses that experience a dramatic increase in sales during the holiday season.
  5. Security: With a cloud-based system, you don’t have to worry about data security. Every transaction is automatically stored online and stays safe – even if your device gets crashed or stolen.
  6. Accurate Business Insights: A cloud-based POS solution allows you to track every transaction along with complete purchase history. You can monitor every payment at any time, both online and personally.

A One-Stop System

A comprehensive POS system features various innovative tools and eliminates the need to invest in new marketing software. Suppose your POS is customized to cater to the unique needs of your business. In that case, it will save you considerable time, effort & money.

The Cons of Cloud-based POS

Despite all the advantages mentioned above, cloud-based POS systems come with their share of drawbacks and offer little room for customization.

  1. Dependency on the Internet: Cloud deployed POS systems need a stable internet connection to function at peak efficiency. You may experience a disruption in service if your Internet connection is not constant. So, suppose you’re running a retail store. In that case, you may want to take precautionary measures and have an alternate internet connection that serves as a backup in case of downtime.
  2. Limited Scope for Personalization: A cloud-based POS solution has limited capabilities when it comes to supporting personalized customer service. Hence, for some restaurants and retail stores, custom POS development may be a recommended solution. It offers the flexibility to personalize customer support.

Choose Wisely

To determine which POS development model best suits your business needs, you can consider the following essential factors:

  1. Periodic Updates: A distinct difference between a cloud-based and on-premise POS system is how software and hardware changes are managed. A perpetual license for an on-premise solution means you may not receive updates. Due to this, any system improvement will result in downtime. Fortunately, most SaaS providers notify their customers in such cases.
  2. Cost: A Cloud-based POS system often comes with monthly charges for continued use. As opposed to that, an On-premise POS solution typically involves a one-time upfront cost for a perpetual license and implementation. Additionally, if you need to buy new hardware, your overall price will go up further.
  3. Number of Locations: Do you operate from one location, or are you a part of a global brand? This is a decisive factor when choosing software. A cloud-based POS system is ideal for international brands with multiple locations spread across different countries. On-premise is apt for a single store that needs a POS solution to record transactions.
  4. Dependence on Hardware: Suppose you are working with medical equipment, cash registers and barcode scanners. In that case, you’ll need a software solution that can be deployed on every machine. You can consider using a cloud-based POS system for handheld devices. On-premise software is typically recommended for big engines.
  5. Real-time Support: Software does not always function exactly the way you planned. Disruption in the Internet connection or changes to an OS can result in unwanted delays and downtime. In comparison, most software service providers offer some level of support during deployment. After implementation, assistance may not be available for free. Some cloud-based providers provide prompt and free support 24X7, though it may not be the case always.

How Custom POS Development Can Keep You a Step Ahead

If you need a smart POS system that makes it easy for you to run your business, you can consider custom POS development. With an end-to-end app development service, you can deliver an unsurpassed Omni-channel experience with a range of features like auto-generated reports, customer engagement modules and loyalty programs.

With POS development, you can build a high-performance, secure & scalable system that is flexible to adapt and evolves with your growing business needs. A customized solution gives you unparalleled control and flexibility to enhance customer experience and increase revenue.

POS Hardware For Retail or Restaurant -DepositPhotos

Ryan Williamson

Ryan Williamson

A professional and security-oriented programmer having more than 6 years of experience in designing, implementing, testing and supporting mobile apps developed. Being techno-geek, I love to read & share about the latest updates in technology including but not limited to IoTs, AI, application development, etc. In my free time, I like to play football, watch movies and explore new places.

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