Glossary Definition: On-Premise Software

On-premise software is a solution that lives onsite and requires dedicated hardware, installation, and IT support before it can be utilized. As such, the upfront capital investment is a lot higher than cloud-based SaaS solutions as a result.

Unlike SaaS solutions which bake support and updates into the cost, on-premise software users typically incur additional costs for maintenance related to software updates and/or issues, including support.

Industry insiders often refer to on-premise software by its shortened version, known as on-prem software. It may also be called on-premises software, indicating the system is onsite as opposed to remote, or offsite.

On-premise software solutions are based entirely in-house. Everything from setup to ongoing maintenance is handled onsite, by a team of experts. On-premise software is only accessible via specific company devices. Companies that leverage on-premise software solutions have full control over the servers that comprise the physical hardware of their systems.

While on-premise hardware exists in a specific physical location, access to it is not geographically restricted. For example, a company can host an on-prem solution at their New Jersey headquarters, but then host it in multiple additional locations such as Boston, Chicago, and San Diego.

In contrast, cloud-based software lives online and is hosted and delivered over centralized networks, generally the internet. It is available from anywhere, at any time — so long as there's an internet connection. SaaS solutions are updated on an ongoing basis, from a remote location, and do not require a team of in-house experts to set up or maintain the system.

Similar to on-premise software, these companies have full control over who has access to what information, and when. Stakeholders are able to connect and collaborate from anywhere in the world, and work from the same dataset. This is a huge advantage of cloud-based software. These are the main differences between on-premise vs cloud-based software.

On-premise software has a number of use cases in pharma. For example, on-premise software may be used for batch processing, temperature monitoring, or to assess machine performance.

Pharma companies work with sensitive data, including patient information and trade secrets, and often opt to store this information on premises, aka onsite. That’s why on-premise software for pharma tends to be common. Since the software can be stored on site, special attention can be paid to the setup and processes.

The purpose of on-premise software for pharma companies is to provide these highly regulated organizations with on-site control over their data and systems. On-prem software allows pharma companies to determine who has access to data, when they have access, and where it’s accessible.

However, use of on-prem software in pharma is on the decline, with the industry increasingly turning toward cloud computing. As McKinsey reports, 16 out of the top 20 pharma companies are using cloud technology as of 2021.

There are many examples of on-premise software for pharma, the examples below are not an extensive list. It’s also important to note that many (if not all) of these solutions are also available as cloud-based options.

On-prem software for pharma examples include:

• Enterprise Resource Planning (ERP) software
• Manufacturing Execution Systems
• Manufacturing Operations Management
• Material Requirements Planning platforms

On-premise software is important for pharma companies because it allows organizations to house sensitive information, such as patient records, without the associated risks (such as cyber data breaches) of hosting it online.

In the pharma industry, on-premise software is uniquely suited to address top security issues such as patient confidentiality and cyber security. Additionally, large files that may be difficult to upload to the cloud due to their size (such as MRI and therapy scans) can also be managed via in-house software.

In addition, data stored on premises can be accessed more quickly in certain situations. Let’s say a manufacturer based in Switzerland is accessing U.S. cloud-based data. There might be a few seconds of delay, which isn’t likely to cause too much of a problem. However, for time-sensitive processes like weighing materials, that few seconds could be more noticeably disruptive. In this scenario, having the weighing solution onsite allows the response to be received much more quickly.