The cloud or on-premise decision should made early by the selection steering team. In other words, do you want a cloud-based or on-premise solution?

Cloud - runs on external servers, managed by a partner/vendor and updated automatically (often on a schedule determined by the partner/vendor).

On-Prem - the solution runs on servers you manage that may be physically in-house or located on a hosting service that you manage

Today, some vendors only offer a cloud-based solution. While others offer both a cloud and an on-premise solution.

The solution licensing will be different.

Cloud licensing is usually based on a named user monthly/annual subscription fee. This fee normally includes some kind of support provision and all solution updates, in other words there is no annual 'maintenance' fee because it is built-in to the subscription fee.

On Prem licensing is usually based on a named/concurrent perpetual (lifetime) user fee that is paid only once. There is normally an annual 'maintenance' fee per user of somewhere between 15-25% of the user licence value that is billed every year.  Obviously this fee can be sunstantial if you have a high number of user licences.

The functional differences between a cloud and on-prem solution may be minimal but there will always be a user experience (UX) difference as the cloud version will run in a browser and not a desktop client (e.g. Windows or Apple-centric client). Sometimes this UX can mean both positive and negative differences between the two versions for specific users.

Most vendors are reducing investment in on-prem solutions and all the forward investment is going into cloud solutions. In practice, this means that on-prem solutions will become 'legacy' offerings that will be 'sunset' and subject to declining and eventually no, support.

Selection 5