An Overview of ERP Software Types: On-Premises, Cloud and Hybrid

ERP or enterprise resource planning is a software solution that integrates the main functional areas of a company into a unified system. It is used to collect, organise, analyse and transfer information to each member of an organisation.

With this platform, users can manage their business processes relating to human resources, finance, and so on. Moreover, it also helps them to improve their strategic decision-making.

To ensure that ERP systems resolve the common business problems, one must first understand and determine the needs of its organisation.

Is there a need to deploy the ERP application quickly? Is there an existing ERP solution but wanted to add features? Is running the app in-house an option?

Finding answers to these questions may in choosing the appropriate ERP software without a fuss. But for some who can’t decide which type of system to utilise, this blog is for you.

Read on to find out the three different types of ERP program along with their unique usage.

Choosing an ERP Solution


As the name suggests, an on-premise type refers to the ERP that is deployed inside a company’s premises; it is installed locally on a company’s computers and servers.

This deployment option gives businesses the control and accountability from the acquisition to installation and operation of servers and storage, as well as the maintenance of the software and hardware.

Also, an on-premise ERP is priced under a one-time perpetual license fee. This implies that investing in this kind of application will require higher costs and longer time frames as it likewise entails recurring fees for support, training and updates.

On-premise ERP software is ideal for companies:

with a highly competent IT staff who can maintain servers and enterprise software

that can’t store data in the cloud due to compliance rules

with only a single location


Cloud ERP software is the complete opposite of on-premise solutions. This one is not deployed in an organisation’s data centre but on either a public or private cloud.

In a public Cloud scenario, IT resources are not made available internally but are made available online by an external service provider. For this reason, this option can be costly but a lot more manageable.

A private Cloud ERP, on the other hand, boasts of a privately-owned architecture. This propriety data centre architecture provides users with greater control, agility and scalability with on-demand access.

Simply put, cloud enterprise resource planning software is an operating expenditure while the former is a large investment up front.

Cloud ERP system is ideal for businesses:

with inexistent IT staff

that have a small IT staff who can’t handle security or backup systems

  • who prefer a more consistent month-to-month expenditure
  • with multiple locations that all need to use ERP simultaneously
  • located in a place that is prone to natural disasters like a flood, fire or storm


A hybrid ERP program integrates the first two solutions into one system. It combines the approaches of cloud-based software and an on-premise system to offer the best of both worlds.

This modern enterprise solution provides a solid base of on-premise functionality and agile cloud applications. Through this ERP type, businesses can address both unique existing processes and other rapidly-evolving, high-impact areas.

Plus, companies can operate business-critical applications and even some applications with special requirements or technical limitations, under their control and data centres, or in a Cloud scenario.

Hybrid ERP software is ideal for organisations:

with an existing on-premise ERP solution but need to add some cloud features or mobile apps

with the main location but with several satellite branches or warehouses

looking to integrate their system into web-based services or software

requiring members to access their critical ERP functions on the go

Which ERP Software is Popular

Enterprise resource planning software is a suite of applications that form a cohesive business management system.

Below is the list of the most popular ERP software solutions providers:

  1. NetSuite ERP
  2. Business Cloud Essentials
  3. Sage Intacct
  4. Brightpearl
  5. Odoo
  6. ECount ERP
  7. PeopleSoft
  8. Sage 100 ERP
  9. FinancialForce ERP
  10. SAP Business One

Take Your Pick Today

While the value of ERP is clear, the software type to use still depends on businesses and their needs. That is why organisations must first know their current situation and decide on what solution to acquire.

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Written by Saj Parreno

Saj Parreno is a content strategist with SEO and digital marketing expertise. She gained experience in the field from working for high tech companies and start-ups and is on a mission to help businesses communicate value and reach more people.

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