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Cloud vs on premise point of sale systems | What’s right for you?

Home Our Blog Hospitality Cloud vs on premise point of sale systems | What’s right for you?
, Cloud vs on premise point of sale systems | What’s right for you?, NFS Technology

Executive Summary

What is a cloud-based POS system?
What are the advantages of a cloud-based POS system?
What are disadvantages of a cloud POS solution?
What are the advantages of an on premise POS system?
What are the disadvantages of on premise POS system?
Conclusion

When it comes to selecting a restaurant point of sale solution, there are two choices – either an on premise POS system or a cloud POS solution.

A traditional on premise POS system is typically linked to computer or server on the premises whereas a cloud POS solution is accessed online as all data processing is conducted in the cloud.

Let’s explore the advantages and disadvantages of both approaches so you can make an informed choice – whether you are looking to replace an existing solution or are starting fresh.

What is a cloud-based POS system?

A cloud based POS system or a SaaS (software as a service) based POS system is accessed through the internet.

A key feature of a cloud based POS system is that it doesn’t require a dedicated POS terminal – it will work happily on an iPad, a desktop PC or an Android tablet. It can, therefore, be a lot more portable than the traditional on premise POS system which is based around dedicated fixed terminals.

In terms of core functionality, a cloud POS solution will perform the same tasks as an on premise POS system – managing stock, printing receipts and processing orders.

What are the advantages of a cloud-based POS system?

The advantages of a cloud-based POS system are:

Remote access

With a cloud-based POS system you are not tethered to a physical location. You can run reports on the business from anywhere in the world with an internet connection.

Data security

SaaS technology is incredibly resilient. All data is backed up online in the cloud so even if you drop and break your iPad – no problem – the data is still there, protected and readily available.

Scalability

As restaurant operators grow their business it will be necessary for the POS system to be scaled up when needed to match their business size. Cloud POS systems are designed with scalability in mind so that restaurateurs can choose to scale up the POS without spending too much time, effort, and budget. Adding additional users and sites is straightforward.

Business insights

A cloud POS system enables you to track all transactions, or sale histories so you can view this information anywhere at any time with real-time data synchronisation. This is a great feature for multi-site operators as they can get a holistic view of their business in real-time at the touch of a button.

Choice of hardware

With an on premise POS system you are limited to relatively expensive and largely immobile terminals. With cloud POS systems you can use an iPad or Android tablet for table service or a desktop PC at the front desk. With appropriate accessories such as stands and cash drawers you can also use the tablet front of house as well as tableside.

Regular updates

The beauty of a cloud-based POS system is that all updates are rolled out automatically and there is no need for additional software installation. You can enjoy new features and benefits straight away at no additional cost!

What are disadvantages of a cloud POS solution?

While it is a great option, there are a few disadvantages to selecting a cloud POS solution:

Requires good internet

If you are in a location where internet is intermittent it may be prudent to consider an on premise POS system. A bad connection will at best impede service and, at worst, cause your POS system to fail completely with a potential loss of data.

Non-customisable Solution

POS cloud software solutions do not allow room for customisation. This poses no problem for small operators who lack time and budget for such upgrades. However, larger operators may prefer to be able to make changes to reflect their brand and/or their specific requirements.

Limited customer support

While they typically offer online support, cloud-based POS systems often do not require tailored support as they are usually intuitive and easy to use. For larger operators, a traditional on premise POS systems may be more suitable as support for these platforms can be tailored to suit their needs.

What are the advantages of an on premise POS system?

A traditional on premise POS system has some distinct benefits over its POS cloud counterparts. Simply, it is a perfect option for large enterprises and restaurants.

Not relying on the internet

Unlike cloud POS, a traditional system does not depend on the internet as servers are in a closed network. POS can work smoothly and efficiently with the Wi-Fi disconnection.

One-time payment

Most of the time, a traditional POS is sold with a one-time cost. Unlike the monthly subscription fee of cloud POS, you only pay once to own an on premise POS.

Full control and customisation

On premise POS systems reside entirely on your own servers, giving you complete control over the software configuration and customisation. You can tailor the system to your business’s specific needs and processes.

Data security and privacy

With on premise POS systems, your sensitive business data remains entirely within your physical premises. This enhanced security reduces the risk of data breaches or unauthorized access compared to cloud-based systems that store data remotely.

Faster transaction processing

On premise POS systems typically offer faster transaction processing compared to cloud-based systems, as they don’t rely on internet connectivity for data transfer and processing. This can be crucial for businesses with high transaction volumes.

Offline operation

On premise POS systems can operate independently of an internet connection, ensuring uninterrupted transactions even during network outages or power disruptions. This is crucial for businesses that rely on their POS systems for critical operations.

Local support and expertise

On premise POS systems typically provide local support from the provider or their authorized partners. This can be more convenient for businesses that need immediate assistance or prefer face-to-face interactions with support personnel.

What are the disadvantages of on premise POS system?

On premise POS systems also have certain disadvantages that may make them less appealing for some operators:

Higher initial investment

On premise POS systems involve a higher upfront cost due to the hardware and software purchase requirements. You’ll need to purchase or lease servers, manage hardware maintenance, and invest in software licenses.

Technical expertise required

On premise POS systems require technical expertise to install, configure, and maintain the software and hardware components. Businesses may need to hire IT staff or rely on external consultants to manage their POS infrastructure.

Limited scalability

On premise POS systems may have limited scalability in terms of the number of users or transactions they can handle. Adding more hardware or software components can become expensive and complex.

Data security concerns

While on premise POS systems offer greater data security, potential security breaches can still occur due to human error, malware attacks, or hardware malfunctions. Businesses need to implement proper security measures and regularly conduct backups.

Software updates and patches

On premise POS systems require businesses to manually install software updates and security patches, which can be time-consuming and error prone. Missed updates can leave the system vulnerable to security risks.

Conclusion

Both cloud POS systems and on premise POS systems have their pros and cons. Generally speaking, cloud POS systems are an affordable option for smaller operations whereas on premise is ideal for larger operators particularly those where speed and volume are paramount.

An on premise POS system offers greater control, security, and offline capability, but they require higher upfront investment, technical expertise to implement and maintain, and need ongoing maintenance. With faster transaction speeds and specialised hardware, they are a good choice for, say, quick service.

Cloud POS systems offer a convenient approach to managing hospitality operations. They provide restaurants with 24/7 access, scalability, and flexibility. A POS cloud based system also simplifies updates and maintenance, ensuring that businesses always have the latest features and security patches. Additionally, a POS cloud based system offers real-time data insights, enabling businesses to make informed decisions about inventory management, marketing, and customer service.

At NFS we offer a best of breed approach as one size does not fit all. We recommend solutions which will meet your needs today and into the future.

Contact us today so we can discuss which option best meets your needs.

Chris Cartmell
Chris Cartmell Software and Technology Expert Posted on: December 15, 2023

Executive Summary

What is a cloud-based POS system?
What are the advantages of a cloud-based POS system?
What are disadvantages of a cloud POS solution?
What are the advantages of an on premise POS system?
What are the disadvantages of on premise POS system?
Conclusion
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