On-Premises vs. The Cloud: Can You Lower TCO Without Compromising Performance? - VTEX - Accelerate Commerce Transformation

On-Premises vs. The Cloud: Can You Lower TCO Without Compromising Performance?

Alexandre Soncini
31 May 2016

Online retailers have two things to watch out for- customer experience and the bottom line. Keeping the two in balance takes good decision-making when it comes to platform selection.

In the last part of our series, we will be looking at digital commerce hosting options- on-premises or the cloud- and how vendor choice can make or break an online retail store.

Off-site or in-house?

Cloud hosting is increasingly popular but e-retailers still hesitate to make the switch, worrying about downtime and poor customer service from vendors. There can also be financial or logistical issues getting the platform to do what is needed, leading many to reject the idea of a one-size-fits-all SaaS solution.

For that reason, some retailers opt to keep hosting in-house, using and maintaining licensed software by themselves. Others go the open-source route, which can hosted on or off-site, because it gives them the option to view and alter source code.

Your SaaS vendor makes or breaks you

In-house and open source platforms are being edged out as retailers make the shift to cloud storage. High-end omnichannel SaaS services take away a lot of the pain of digital commerce management by eliminating hardware maintenance or repairs, server performance problems, and data issues.

Cloud storage is getting better and better as vendors develop flexible, affordable and fluidly adaptable digital commerce software. The best companies can deploy updates with no downtime, tailor customer experience on the fly and are fully integrated with mobile responsiveness.

The future belongs to the cloud

Subscription revenue from retailers using cloud-based software platforms is expected to reach $53 billion this year, up from $22 billion in 2015. Forrester Research suggests that by 2020, cloud-based software could account for more than half of the software industry’s revenue because it is the best way retailers have to keep up with changes.