Cloud vs On-Premise Digital Signage: The Ultimate 2024 Guide

When investing in a digital signage platform, one of the most important choices you will have to make is choosing between a cloud-based or an on-premise solution. In one of our previous articles about using digital signage for your business, we mentioned that digital signage has been around for so many years and has been an important tool for communication in those years till now.

However, there are still a lot of questions concerning digital signage, and this is because of the plethora of confusing terminologies and vague guides that do not give complete explanations of the different types of digital signage and their benefits.

For instance, one of the most common sources of confusion is the difference between cloud-based and on-premise digital signage.

In this article, we will explain the definitions, benefits, and disadvantages of each system and offer tips for making the right choice. But, before we dive in, let’s start with the basics.

The Main Components of a Digital Signage System

In digital signage systems, there are three vital components. These are:

1. Digital Signage Displays

For digital signage displays, there are a lot of easy-access options. These might include:

Consumer-grade TVs
Commercial monitors
Ordinary computer monitors

You might see these displays in various forms, such as LCD or LED screens, freestanding displays in malls, kiosks with digital menus in restaurants, or perhaps big digital billboards.

2. Digital Signage Players

No matter the amount of display you have, if there are no digital signage players around, the displays will be unable to play any kind of content. A digital signage player is needed to play content on the screen. They are devices that connect the displays with digital signage software in order for the screens to deliver, retrieve, and playback the content scheduled through the content management system (CMS).

3. Digital Signage Software

Digital signage software serves as the Content Management System (CMS). It is the most important part of any digital signage system and it oversees all content delivered to displays through digital signage players. This software ensures that content is correctly formatted, playlists are well-arranged, and it also manages the connected devices.

Now that we know the vital components of a digital signage system, let us go on to learn more about cloud-based and on-premise digital signage systems.

What Is Cloud-Based Digital Signage?

Cloud-based digital signage is a type of digital signage system that uses a remote server instead of a locally installed system or software. This system requires cloud-based digital signage players and software to allow for flexibility so that users can conveniently access and manage content remotely through an internet connection.

Benefits of Cloud-Based Digital Signage Systems

Cloud-based digital signage systems have several benefits that give them a competitive edge over an on-premise system. Listed below are some of the many advantages it has:

Technical Ownership: With cloud solutions, you will need minimum commitment or effort as all technical responsibilities will be handed over to a software provider. This removed the need for IT specialists to monitor or maintain the software.
Remote Management: With an internet connection, you can access, edit, and update your digital signage content from anywhere, without stress. This is essential for organizations that are looking into global deployments with multiple screens in different places.
Security: The burden of security is solely on the digital signage solution provider since all data are stored offsite. Most of the time, storing data in the cloud is way much safer as it helps to minimize the risks of unauthorized access, theft, and cybersecurity vulnerabilities.
Scalability: You can add or remove displays from your digital signage network at the touch of a button without extra costs. This allows you to start at a low cost and keep on adding as your business needs grow. This allows for easy growth without pressure on additional costs.
Overall Costs: Cloud systems are more affordable. This helps you to eliminate the need for expensive installations and support costs. This is particularly useful for businesses focused on digital signage in retail.

Disadvantages of Cloud-Based Digital Signage

Cloud-based digital signage has very little disadvantages and they are worthy of mention. These disadvantages may include:

The need for internet connectivity to update content: This can be a problem especially if your company operates in a place with unreliable internet connections or persistent outages.
Potential privacy concerns regarding data security: You will need to be careful when evaluating the offers of any digital signage system, especially if you are handling sensitive data.
Although rare, the total cost of owning cloud-based software could exceed that of on-premise systems over time.

We have seen what cloud-based digital signage system is all about, its benefits as well as its disadvantages. Now, let's go on to On-premise signage so you can compare and contrast between them to choose the best-suited option for you.

What Is On-Premise Digital Signage?

On-premise digital signage systems used to be the norm for any kind of digital signage deployment. This was before the invention of cloud-computing software. They involve having software and hardware locally installed on a dedicated digital signage server.

This setup allows for complete control over the system but also brings higher ownership costs incurred from installation, maintenance, training, and support expenses, as well as recurring costs related to the software.

Benefits of On-Premise Digital Signage

Although on-premise digital signage is widely considered to be an outdated solution that can generate more cost as opposed to profits, there are still some benefits to using them that are worthy of mention.

License Ownership: You can pay once for an on-premise software license instead of having to make recurring subscription fees.
Control: The on-premise digital signage system allows you to maintain complete control over deployment, hosting, and updating of the software.
Potentially lower cost: If after purchasing the software license no further updates are needed, then the total costs might be lower than cloud-based services that include a significant number of screens over time.
Customization & Integrations: This system allows for greater freedom with customizations as well as other system integrations since you are solely responsible for every aspect of the network.
Security: With self-hosting, you directly manage the system’s security, and you do not have to worry about the precautions or safety measures taken by digital signage suppliers to protect your data.

Disadvantages of On-Premise Digital Signage

Even with the number of benefits that on-premise digital signage may offer, they have quite a large number of disadvantages as well. On-premise solutions:

Require a significant amount of upfront investment costs
Require extensive technical expertise for installation, maintenance, updates, and support. If your company lacks a large IT team and a suitable budget, this can pose a very serious problem.
They can be inefficient for multi-location operations since physical access is needed for updates of the digital signage content.
Scaling up and down with on-premise systems is much more expensive in time and money than a cloud-based digital signage system.

For further insights, see our breakdown of digital signage costs.

Factors To Consider When Making Your Choice

After reading through all that has been said already, choosing between cloud-based or on-premise systems should not be a hard task any longer. However, to make it even more easy for you to make your choice, there are a few things you should also take note of.

Some of these are your business goals, available resources, content delivery strategies, and the overall structure of your organization.

Listed below are key factors to consider:

Security

Due to the presence of high-quality cloud services, security concerns are mostly a thing of the past. Cloud services now lead in cybersecurity innovation and industry standards; however, it is still very important to do thorough vendor evaluations as they are essential to ensure safety.

Costs & Financial Considerations

The next thing to consider is the financial complications. Make sure to evaluate the total costs of each option. Check the cost of hardware, software, and other ongoing expenses. Bear in mind also the cost of maintenance, training, and support as well. Consider whether you prefer high initial costs, which you can pay at once for an on-premise solution or a payment that you can spread through a recurring subscription fee for cloud-based solutions.

Intended Use

Your intended use of digital signage greatly impacts your decision. Will your intended use be something that requires constant updating? If your answer is yes, then you cannot go for something that would require physical access.

Also, will your business be operating across multiple screens? If the answer to that is still yes, then you know that a cloud-based solution is the obvious choice. For more examples, check out our content ideas for digital signage.

The Size & Scalability of Your Organization

The size of your business and your need for flexibility are important. Cloud systems provide easy scalability without extra costs, making them ideal for smaller organizations.

Available Resources

Just like we stated earlier, on-site solutions demand a dedicated IT team that will be responsible for installing, configuring, maintaining, and updating the software, while cloud-based options use free digital signage templates. This helps deliver engaging content efficiently.

On-Premise vs. Cloud-Based Digital Signage: Which One Is Right for You?

Now that you understand both types of digital signage, let us focus on practical details. Generally, cloud-based solutions are preferred unless specific conditions apply.

When To Choose an On-Premise Digital Signage Solution

If any of these apply to your business, then you may need an on-premise digital signage system.

Businesses need total control and corresponding responsibilities.
Large enterprises can manage their on-site infrastructure.
Companies with skilled developers for system updates.
Organizations in sectors with strict privacy and security regulations.
When extreme customization needs can't be met by cloud solutions.

When To Opt for Cloud-Based Digital Signage

If any of these apply to your business, then you may need a cloud-based digital signage system.

Organizations lacking technical expertise or time for setup.
Businesses deploying 20-50 screens.
SMBs seeking quick value generation.
Companies focused on content creation and advertising.
Integrators want affordable, plug-and-play solutions.
Restaurants, retail stores, or smaller hotels with limited IT resources.
Businesses minimize upfront costs for maximum impact.

For more on choosing the right software, check out our comparison of digital signage software.