How is Cloud-Based POS and On-Premise POS defined?
Installing a restaurant POS system or cloud POS solution is one of the two main options available for selecting a restaurant point of sale system. On-premise refers to a POS system connected to a computer or a server located at the facility where the business operates, while a cloud POS solution takes all data processing to the cloud.
Understanding Cloud-based POS
A cloud point of sale (POS) system accesses the POS system over the internet. One of the benefits of a cloud POS solution is that it does not require the use of a dedicated POS terminal. It can be used only on mobile devices such as iPads, Android tablets, and desktop computers. This provides a far more portable option than the traditional fixed or dedicated terminal.
A cloud-based POS system provides the same capability as a traditional on-premise or fixed POS system. Both types of systems perform essentially the same functions as managing inventory, processing orders, or printing receipts.
Understanding On-premise POS
An on-premise POS system would store data locally, either on servers or the computer. Software would also need to be installed on-site, and the organization would have control of the data and system.
On-premise systems would also typically have higher start-up costs, as hardware, software licenses, and potentially a dedicated server would be needed. Maintenance and updates would be performed manually or with help.
Key differences between cloud-based and on-premise POS
| Feature | Cloud-Based POS | On-Premise POS |
| Setup & Cost | The initial investment cost is reduced thanks to a monthly or annual subscription. | The initial investment cost is significantly increased due to hardware, software, and installation of IT software. |
| Accessibility | Anytime, anywhere, and on any device, you can examine the sales, inventory, and reports. | Typically, it is only the retail outlet that has access. |
| Maintenance | Updates and refinements are installed seamlessly without any extra effort. | These updates need to be applied manually, and possibly with the help of technical support. |
| Internet Dependency | Needs a steady internet connection, although most systems have an offline backup mode available. | Everything works in offline mode and does not rely on an internet connection to work. |
When a cloud-based POS makes sense
- Operate multiple locations
- Need real-time access to data from anywhere
- Want automatic updates and backups
- Prefer lower upfront costs
- Expect to scale or change operations over time
When an on-premise POS may be appropriate
- Have reliable in-house IT support
- Prefer full control over data storage
- Operate in areas with limited internet connectivity
- Have stable operations with minimal need for system changes