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Cloud or on-premise: which POS software is right for your business?

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, Cloud or on-premise: which POS software is right for your business?, NFS Technology

Executive Summary

Overview of Cloud-based POS systems
Overview of On-premise POS systems
Comparative analysis

The choice of a Point of Sale (POS) system can significantly impact the operational efficiency, customer experience, and ultimately, the success of a business. POS systems, serving as the hub of sales, inventory management, and customer management, have evolved from mere cash registers to sophisticated platforms that offer many features to support businesses in their daily operations. You need to get the right software as on-premise or cloud based pos systems for retail are not designed for restaurants – you need to get something tailored.

At the heart of this evolution is a critical decision that businesses, regardless of size and industry, find themselves grappling with: should they opt for a cloud-based POS system that boasts flexibility and real-time access, or a traditional on-premise solution known for its reliability and control? The answer is not straightforward, as each option comes with its unique set of advantages and challenges.

It is essential to keep in mind that the right choice varies from one business to another, depending on various factors such as the nature of the business, budget constraints, and specific operational requirements.

With this guide we want you to be able to choose the best EPOS system for restaurants for your business.

Overview of Cloud-based POS systems

Cloud-based POS systems represent a modern approach to managing sales and operations, harnessing the power of the internet to offer businesses a flexible and scalable solution. Unlike traditional systems, a cloud POS operates on a software-as-a-service (SaaS) model, where the software is hosted on remote servers and accessed via the web or an app. This model offers several distinct advantages and some drawbacks that businesses need to consider.

Key features and benefits:

Accessibility: one of the hallmark features of cloud-based POS systems is their accessibility. Business owners and managers can access sales data, inventory levels, and customer information in real-time from anywhere in the world, provided they have an internet connection. This level of accessibility supports informed decision-making and allows for greater flexibility in managing operations remotely.

Scalability: as businesses grow, their needs change. Cloud POS systems are inherently scalable, allowing businesses to add more registers, locations, or features with minimal hassle. This adaptability ensures that the POS system can grow alongside the business, without the need for significant overhauls or investments.

Cost-effectiveness: initially, cloud-based systems may appear more budget-friendly, especially for small to medium-sized businesses, due to their subscription-based pricing models. There’s no need for substantial upfront investments in hardware or software licenses. Instead, businesses pay a monthly or annual fee that often includes updates, maintenance, and technical support, reducing the total cost of ownership.

Potential drawbacks:

Dependency on internet connection: The primary limitation of cloud-based POS systems is their reliance on a stable and fast internet connection. Should the internet go down, accessing the POS system or processing transactions can become challenging, potentially disrupting business operations.

Ongoing costs: while the initial costs are lower, the subscription fees can add up over time, making it more expensive in the long run. Businesses need to carefully consider their long-term costs when opting for a cloud-based system.

Data security concerns: storing sensitive business and customer data on remote servers brings about concerns regarding data security and privacy. Reputable cloud POS providers invest heavily in security measures, but businesses should conduct thorough research to ensure their data will be protected against breaches.

Overview of On-premise POS systems

On-premise POS systems are the traditional choice for many businesses, offering a more conventional approach to sales and inventory management. Unlike their cloud-based counterparts, on-premise solutions are installed locally on a business’s servers and run on its network. This setup provides businesses with full control over their POS system and data, but it also comes with its set of challenges and considerations.

Key features and benefits:

Control and ownership: the most significant advantage of on-premise POS systems is the level of control and ownership they offer. Businesses have complete autonomy over their system, including customisation, data management, and security protocols. This control is particularly appealing for businesses with highly specific needs or those operating in industries with stringent data protection regulations.

Offline functionality: on-premise systems do not rely on an internet connection to operate. Transactions and operations can continue seamlessly, even during internet outages, making them reliable in environments where connectivity is inconsistent or unreliable.

One-time investment: although the initial cost of an on-premise POS system can be high—due to hardware purchases, software licenses, and setup fees—it’s a one-time investment. Over time, this can be more cost-effective than recurring subscription fees associated with cloud-based solutions, especially for larger businesses with the capital to invest upfront.


High upfront costs: the initial investment for on-premise POS systems is significant, making it a less viable option for small businesses or startups with limited budgets. The cost includes not only the software and hardware but also maintenance and potential upgrades.

Maintenance and updates: businesses are responsible for maintaining their on-premise systems, including hardware repairs and software updates. This responsibility requires in-house IT expertise or external support contracts, adding to the operational costs.

Scalability issues: scaling an on-premise POS system can be more complex and costly than a cloud-based solution. Expanding the system to accommodate business growth often requires additional hardware purchases and software licensing fees, as well as potential downtime during the upgrade process.

Comparative analysis

When choosing between a cloud based POS system and on-premise POS systems, businesses must weigh various factors to determine which solution aligns best with their operational requirements, budget, and long-term goals. This comparative analysis delves into the performance, security, and cost implications of each system, offering insights to help make an informed decision.

Cloud based POS systems are ideal for businesses that operate in multiple locations or require remote access to their sales and inventory data. The flexibility and real-time data synchronization make it easier to manage operations on the go. However, performance for cloud based pos systems heavily depends on internet connectivity, which can be a limiting factor in areas with unreliable internet service.

On-premise POS systems excel in environments where stability and speed are paramount, and internet connectivity might be sporadic. Since the system operates independently of an internet connection, businesses can ensure consistent performance even in offline modes. This makes it suitable for high-volume transactions in settings like large bars, clubs and restaurants.

Security Aspects: data security in cloud-based systems involves trusting a third-party provider to safeguard sensitive information. While reputable cloud-based POS systems for restaurants providers implement robust security measures, the nature of cloud storage inherently poses risks, especially in scenarios of widespread cyber threats. Businesses must assess the provider’s security credentials and compliance with industry standards.

On-premise systems offer businesses the opportunity to tailor their security measures to specific needs, potentially providing a higher security level. Since the data is stored locally, businesses have more control over access and protection. However, this also means that the responsibility for security updates and breach prevention falls squarely on the business, requiring a dedicated IT security team.

Cost implications: cloud-based pos systems for restaurants typically have lower initial costs due to their subscription model, which includes updates and support, making them attractive for small to medium businesses. On-premise systems, with their high upfront investment for hardware and software, might seem less appealing initially but can offer cost benefits in the long run.

The ongoing subscription costs of cloud-based POS systems can accumulate, potentially making them more expensive over an extended period. Conversely, on-premise systems, despite their higher initial cost, may become more economical, as businesses only incur significant costs during upgrades or expansions.


Deciding between a cloud based POS system and on-premise POS systems requires a careful assessment of your business’s operational requirements, budget, and growth aspirations.

While cloud-based systems offer flexibility and ease of scaling, on-premise systems provide control and reliability, especially in environments where internet connectivity is a concern. It’s crucial to weigh the pros and cons of each system against your business needs and consider the long-term implications.

We encourage restaurateurs to thoroughly research the market. We can help. Our experts at NFS offer unbiased consultancy providing a tailored best of breed solution based on your needs and future growth plans. We integrate with industry-leading partners to provide functionality that will streamline your efficiency and drive profits today and for many years to come.

Contact us today to find out more.

Chris Cartmell
Chris Cartmell Software and Technology Expert Posted on: March 14, 2024

Executive Summary

Overview of Cloud-based POS systems
Overview of On-premise POS systems
Comparative analysis
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