On-Premise vs Off-Premise: What's Right for Your Restaurant?

October 15, 2023

On-premise point of sale (POS) systems have long been the backbone of restaurant operations. Installed locally, these systems are synonymous with stability and control. However, the landscape is rapidly changing, with off-premise or cloud-based POS solutions gaining ground. The question on every restaurant owner’s mind: which one is right for you? In this blog post, we dive deep into the world of POS systems, exploring the nuances of on-premise vs off-premise solutions.

What is On-Premise POS?

On-premise Point of Sale (POS) systems, or traditional or legacy POS systems, are locally installed software solutions tailored for specific devices within a restaurant. These systems operate within the restaurant premises, making them an integral part of the physical infrastructure.

On-premise POS systems are renowned for their stability, as they rely on dedicated servers and in-house networks. With this system, all data processing, storage, and management happen within the restaurant’s servers.

What is Off-Premise?

Off-premise Point of Sale, often called cloud-based POS, operates on web-based applications on remote servers. Unlike on-premise systems, cloud-based POS solutions do not require local installation. 

Instead, they offer accessibility from any internet-enabled device, providing restaurant owners with flexibility and real-time insights into their business operations. Cloud POS systems use secure servers to store data, ensuring easy access, updates, and data backup from virtually anywhere.

Are Most POS Systems On Premises or Cloud?

In recent years, the restaurant industry has witnessed a significant shift towards cloud-based POS systems, reflecting the industry's evolving technological landscape. According to a survey, a remarkable 71% of respondents emphasized the importance of integration and cloud-based functionality when making their POS purchases. This statistic underscores the industry's strong inclination towards cloud-based solutions. 

Moreover, this trend is reinforced by the increasing demand for seamless online functionality, loyalty tools, delivery integration, and Software-as-a-Service (SaaS) solutions among restaurant operators.

The survey also highlights other essential factors influencing POS system decisions. Artificial intelligence (AI) emerged as a significant consideration, with 57% of respondents showing interest in advanced technologies for restaurant operations

Looking ahead, research indicates that 43% of restaurants prioritize researching new POS systems for implementation post-2023. Nearly half of restaurant operators plan to explore and test new Restaurant POS systems, reflecting a growing need for platforms offering advanced features and increased flexibility, including mobility. This data collectively underscores the industry's strong momentum towards adopting cloud-based POS systems, aligning with the changing dynamics of the restaurant business.

What Is the Difference Between On-Premise and Off-Premise?

The fundamental distinction between on-premise and off-premise solutions lies in their architecture, accessibility, and infrastructure. 

On-premise solutions are localized, requiring in-house servers and IT expertise for maintenance, offering control and security. However, this often comes at the expense of mobility. 

In contrast, Off-Premise systems operate on the cloud, eliminating the need for extensive physical infrastructure. They offer real-time data accessibility, enabling you to monitor your restaurant’s performance on the go, liberating you from the confines of physical space. Choosing between the two hinges on your restaurant’s needs, ambitions, and operational preferences.

Here’s a quick comparison to guide you:

On Premise Vs Off Premise

Is Cloud POS as Feature-Rich as On-Premises?

Absolutely. The misconception that cloud-based POS systems lack the robustness of their On-Premise counterparts is outdated. Modern Off-Premise solutions offer many features, catering to various restaurant types and sizes. From inventory management and table reservations to mobile ordering and customer relationship management, cloud-based POS systems encompass different functionalities designed to streamline your restaurant operations efficiently.

Cloud vs On Premise POS System Pros and Cons

Let’s weigh the pros and cons of both systems, giving you a comprehensive understanding to aid your decision-making process.

Pros of Cloud POS System:

  • Accessibility: Access your restaurant data from anywhere, anytime.

  • Scalability: Easily scale your operations up or down without significant hardware investments.

  • Automatic Updates: Cloud systems receive automatic updates, ensuring you always have the latest features and security patches.

  • Cost-Effective: Cloud solutions often require lower upfront costs compared to on-premise systems.

  • Data Security: Cloud providers invest heavily in security measures, ensuring your data is protected.

Cons of Cloud POS System:

  • Internet Dependency: Requires a stable internet connection for real-time operations.

  • Subscription Costs: Cloud systems usually involve ongoing subscription fees.

  • Limited Control: Less direct control over the hosting environment and data management.

Pros of On-Premise POS System:

  • Control: Complete control over your data and system configuration.

  • Customization: Tailor the system to meet specific operational requirements.

  • No Dependency on the Internet: Operates offline, ensuring functionality even without Internet connectivity.

Cons of On-Premise POS System:

  • Initial Investment: Higher initial setup costs due to hardware and software purchases.

  • Maintenance: Responsibility for system updates and maintenance lies with the restaurant owner.

  • Limited Accessibility: Accessible only from the physical location where the system is installed.


Choosing between on-premise and off-premise software solutions is a pivotal decision that can significantly impact your restaurant's efficiency and overall success. Assess your restaurant's specific needs, budget, and operational requirements before making a choice. Whether you opt for the localized control of on-premise systems or the accessibility of cloud-based solutions, ensure that your decision aligns with your long-term goals and customer expectations.

Empower your restaurant with the right Restaurant POS system. Assess your requirements carefully and choose a solution that aligns with your vision. Still uncertain? We’re here to help. Click here to book for a free demo/consultation.

Frequently Asked Questions About On-Premise vs Off-Premise

Explore the following commonly asked questions to understand the distinctions between On-Premise and Off-Premise solutions and make informed decisions for your business.

What is a Non Cloud Based POS System?

A non-cloud based POS system, also known as a Legacy POS System, is a traditional point-of-sale solution that operates locally on a business's own hardware and network infrastructure, without relying on cloud-based services for its functionality. Unlike cloud-based POS systems that store data and operate online, a non-cloud based POS system processes transactions, manages inventory, and generates reports directly on the premises, providing businesses with greater control over their data and security. 

What is an Example of an On-Premise Platform?

An example of an on-premise platform is a company's internal server infrastructure, where all the software applications and data are stored and managed within the organization's physical premises.

What is an Example of Off-Premise?

An example of an off-premise platform is cloud-based project management software, such as Trello or Asana. These platforms allow users to access and manage their projects, tasks, and collaborations online without needing on-site servers or physical infrastructure.

Can I Use Cloud-Based POS Offline?

Most cloud-based POS systems offer an offline mode, allowing your restaurant to continue operating even in the absence of an internet connection. However, there may be limitations, so it's essential to inquire about this feature.

Can I Customize Cloud-Based POS According to My Restaurant’s Specific Needs?

Yes, most Cloud-Based POS systems offer customization options to tailor the software to your unique requirements.

What Factors Should I Consider When Choosing Between On-Premise and Off-Premise POS Systems?

Consider your budget, mobility needs, data security concerns, and long-term scalability. Assess your restaurant's unique requirements and choose a system that aligns with your business goals and operational preferences.

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