On-Premise Vs Cloud PIM - Which PIM System is Best?

Both Cloud and On-Premise PIM deployments come with their own set of expectations and promises for enterprises. Here’s a detailed look at them on a few key parameters.
On-Premise Vs Cloud PIM - Which Product Information Management (PIM) System is Best?

Cloud-based software deployment has been around for a while now, as a method that allows enterprises to use software applications on a plug and play, subscription basis. It has caused a paradigm shift in the software industry. With its on-demand, pay-as-you-use model, Cloud deployment brings certain clear advantages for enterprises users. However, some enterprises still prefer on-premise software deployment due to data security, confidentiality, customizations, and (sometimes) overall cost issues.

Quite naturally, cloud is being increasingly preferred as a viable option for deploying Product Information Management (PIM). However, even with the popularity of Cloud for PIM deployment, many business leaders find it hard to make a choice when it comes to investing in an on-premise or Cloud deployment. There is clearly a huge discussion happening around the merits and demerits of both the methods, as some businesses prefer Cloud over on-premise applications, depending on their priorities and requirements, and some vice versa.


Here we dig deeper to unravel the top five parameters that can help you select the best PIM solution for your business:

1. Speed 

To win in today’s hyper-connected, omnichannel market, businesses need to be agile and nimble. As success is dictated by who gets to the market first, brands need easy-to-implement and highly scalable PIM solutions that enable them to be at the right place at the right time with the right products. A Cloud PIM deployment ensures faster time-to-market by minimizing all deployment-related hassles and disruptions that slow down implementation. By reducing the installation and configuration time, a Cloud PIM solution accelerates time to value. As a PIM application is already installed, configured, and ready to use, it allows you to upload your product data quickly, automate catalog creation, and enrich it for multiple marketing campaigns. With a Cloud PIM, you don’t need to worry about hardware maintenance, application hosting, version updates, and security patches. 

On-premise PIM systems have longer ‘go-live’ schedules as your in-house team has to manage all responsibilities of hosting, installations, configurations, and maintenance. From understanding infrastructure requirements, securing organizational approval, ensuring 24x7 data security to selecting the right resource and optimizing costs, implementing an on-premise PIM is a time-consuming, labor-intensive project involving multiple stakeholders. Although on-premise PIM solutions allow greater control over data and enables high levels of customization, they require significant time investments for licensing, resource planning, equipment setup, system maintenance, and disaster recovery.   

2. Cost 

The most obvious benefit of a Cloud deployment is the significant cost advantage it entails. Not only do you benefit from low setup costs, maintenance costs are also considerably reduced as the cloud environment is often managed by the PIM provider. The cost of Cloud deployment is often much lower than the hardware and software cost of on-premise deployments. The low cost of subscription allows small and medium businesses (SMBs) to rapidly scale their customer base since Cloud allows them to use high-end, expensive PIM software without having to bear the cost burden.

On the other hand, on-premise PIM deployments usually require significant investments, including the cost of software licensing, hardware, server, installation, integration, maintenance, and system upgrades. Add to that the cost of hiring and onboarding resources, training of internal staff, integrating the PIM platform with existing applications, migrating data from legacy systems, and setting up processes and custom workflows. Apart from the initial upfront costs, on-premise PIM also entails additional costs of continuous upgrades and new plug-ins for customizations that ensure that your systems are always updated to meet the latest customer demands. 

3. Security 

Data privacy and security are the biggest concerns of any business leader when choosing a new software application. Although data breaches can happen in both on-premise and Cloud PIM deployments, you must make sure that your PIM solution ensures complete security for your product data at all costs. When using cloud-based PIM solutions, the safety of your data lies with the cloud provider. Being responsible for platform security, operating systems, network, and infrastructure, most cloud solution providers ensure robust data security with universally accepted authentication protocols. Cloud providers are also investing in advanced techniques like encryption and key management, data-tracking, and purging to comply with international data privacy protocols.

Many enterprises  prefer on-premise PIM software solutions over their Cloud-based counterparts for high security and reliability levels. Highly-regulated large enterprises that deal with extremely sensitive information invest in on-premise PIM solutions for maintaining the integrity, confidentiality, and availability of their mission-critical data. As data is stored on proprietary, on-premises storage, an organization can use a hardware security module to reinforce data encryption keys with a firewall. This adds an additional security layer to prevent hackers from de-encrypting stolen files even if they manage to hack your servers. 

4. Control 

If you’re looking to establish total control over how your product data is accessed, stored, and managed, then a Cloud PIM solution is not for you. As a Cloud solution takes care of installation and maintenance, the control – to a large extent - lies with the provider. In such an arrangement, you have no control over versioning. If the provider rolls out a system upgrade or a new version of the application, it will be applicable for all customers without their consent, whether they need the newer versions or not. While a Cloud PIM eases a lot of your tension regarding application setup and data storage, there will always be certain issues that are beyond your control, such as unwanted service disruptions or unforeseen glitches. This is one of the primary reasons why many large organizations prefer on-premise PIM installations over Cloud PIM solutions. 

With an on-premise PIM system, you are in total control. As the application is hosted on your server, you have complete command over your data and system design. You can control upgrades and patch deployments and customize the application to suit your business requirements. An on-premise PIM platform, located physically on-site, allows you to securely store and manage product information, ensure fast retrieval of data, and eliminate version control issues, thereby enabling more control over product information. 

4. Scalability 

A Cloud PIM solution offers the scalability that today’s digital business needs for ensuring success in a highly competitive market. It allows brands to prepare for and respond to swift changes in demand due to market peaks. Instead of investing in new server capacity or hiring additional resources, organizations can adapt their existing PIM systems to meet increasing business requirements. The scalability offferd by Cloudaids in simplifying processes that result in faster time to market, a key success factor in today’s ever-changing business landscape. Cloud PIM installations result in seamless integration with other applications, enabling brands to leverage business intelligence for performance improvements and also to offer personalized product experiences. 

On-premise PIM systems have always been challenged by their limited flexibility and low scalability potential due to the use of physical servers. Moreover, on-premise systems often have restricted remote access, and hence it is impossible to access data housed in these systems from anywhere and at any time. This prevents uninterrupted, round-the-clock access to updated product information – the secret of digital business success – resulting in lost business opportunities. No matter how robust your on-premise PIM is, the lack of scalability in handling large product volumes and accommodating rapidly changing customer demands is a sure sign of failure. 

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At the end of the day, choosing the right PIM solution for your business depends entirely on your data management strategy and business goals. As your business requirements directly influence your selection of PIM deployments – on-premise or Cloud - you need to weigh the costs, benefits, and associated trade-offs carefully to make the best decision that guarantees long-term success.

While on-premise PIM systems score high on data security, Cloud deployments are quick to deploy and extremely easy to use. Also, the costs of upgrades are significantly lower than the traditional on-premise setups. From being substantially less cost-intensive to stimulating a culture of innovation, the benefits of Cloud based PIM not only makes it the obvious choice for most SMBs today but will also continue to maintain its dominance.

Want to know how to choose the right PIM system for your business requirement? Schedule a FREE demo with Pimcore consultants.

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Author:Rajneesh Kumar
Rajneesh Kumar
  • Associate Director Marketing
40 articles by this author

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