Cost. Setting up an on-premises system can be expensive. First, you must take into account the upfront costs of purchasing and installing IT infrastructure. Then, you will have the ongoing maintenance, storage, power consumption, and IT support costs. Updating infrastructure also requires regular, significant investments. You must pay for software licenses upfront, which cloud providers often include in their subscriptions.
Scalability. On-premises software runs locally on each computer. All computers must therefore meet recommended hardware requirements, which can be a problem, especially for complex programs. Purchasing the correct hardware can be expensive as well as difficult to scale. As a result, your IT department will have to set up and maintain new hardware for scalability.
Data Backup. To back up your data and applications on-site, you must create an adequate infrastructure. You must also invest upfront to acquire servers, build a network, and purchase backup hardware. Additionally, your staff must regularly maintain backup infrastructure.