On-Premise or Cloud Hosting? Selecting the best PLM Implementation Solution for your organization

October 05, 2023

For an organization to determine the best hosting environment, the first key point to understand is that the PLM software must be deployed and hosted somewhere. And since PLM systems like Teamcenter handle critical product data and operations, the software and associated information must be stored on secure servers. These servers can either be within an organization’s own IT infrastructure (on-premise) or hosted externally at a dedicated data center facility (cloud).

Benefits of On-Premise Hosting PLM Solutions

So what is on-premise hosting for PLM? On-premise hosting is an option for organizations deploying Teamcenter PLM software. When selecting this option, Teamcenter is installed directly onto servers and infrastructure owned and operated by your company. This allows your organization to maintain complete control over your Teamcenter environment including hardware, security, customization, integrations, system performance, and data privacy.

However, that also means your organization is responsible for providing and managing your own IT infrastructure, servers, and staff required to support an on-premise Teamcenter implementation. Siemens or a value-added Siemens reseller provides the Teamcenter software suite for installation on the customer’s systems and offers IT consulting services to assist with initial configuration and deployment. However ongoing administration, upgrades, backups, and maintenance of on-premise Teamcenter falls to the customer’s internal IT department.

Pros of on-premise hosting:

  • Data Control: With an on-premise deployment, the organization retains full control over its data, including its security, access, and backups. This can be critical for companies dealing with sensitive or proprietary information.
  • Customization: On-premise PLM solutions often provide greater flexibility for customization and integration with existing systems since they are installed and maintained locally.
  • Compliance: Some industries, such as government, healthcare, or defense, may have strict compliance requirements that necessitate on-premise hosting to meet regulatory standards.
  • Performance: In certain cases, on-premise can offer faster data access and processing since it doesn’t rely on internet connectivity or external servers.

Cons of on-premise hosting

  • Higher Initial Cost: Implementing an on-premise PLM system requires significant upfront investments in hardware, software, and IT infrastructure.
  • Maintenance and Upgrades: The organization is responsible for maintaining and updating the underlying architecture, which can result in additional costs and IT resources.
  • Scalability Challenges: Scaling an on-premise solution can be more complicated and expensive, as it requires hardware upgrades and capacity planning to happen internally.
  • Limited Accessibility: On-premise PLM systems may not offer the same level of remote access and collaboration as cloud-based solutions, which can be a drawback for global teams or remote work situations.
a cloud data center

A server room at a cloud data center

Benefits of Cloud-hosted PLM Solutions

Next, let’s clarify what cloud hosting for PLM entails. Cloud hosting is an alternative to on-premise deployment for organizations implementing PLM software. With cloud hosting, Teamcenter is installed on remote servers provided by third-party cloud services (like Microsoft Azure for example) rather than on locally owned infrastructure. By leveraging cloud infrastructure, this model can reduce the client’s IT management responsibilities, since they work with the cloud provider to manage all hardware, security, backups, and performance. Cloud hosting allows customers to scale Teamcenter usage up or down through flexible cloud subscriptions. Cloud hosting can provide access to hardware resources in a timely manner and may offset upfront capital expenditures.

Pros of cloud-hosted PLM:

  • Cost-Effective: Cloud-based systems typically have lower initial costs since there’s no need to invest in on-site infrastructure. Pricing is often based on a subscription model, making it more predictable.
  • Easy Scalability: Cloud solutions can easily scale up or down based on the organization’s needs, allowing for greater flexibility as the business grows or contracts.
  • Automatic Updates: Some cloud providers handle various updates and maintenance, ensuring that the architecture is continuously up to date with the latest features and security patches.
  • Accessibility and Collaboration: Cloud-based environments offer better accessibility, enabling users to access data and collaborate from anywhere with internet access, fostering more efficient teamwork.

Cons of cloud-hosted PLM:

  • Data Security Concerns: Storing sensitive data on external servers raises security and privacy concerns. Although reputable cloud providers implement robust security measures, some organizations might still prefer to keep their data in-house for maximum control.
  • Dependency on Internet access: Cloud storage relies on stable Internet connectivity. If the internet goes down, users may face disruptions in accessing and working with data.
  • Compliance Challenges: Certain industries or regions may have strict regulations regarding data storage and transfer, which can impact the feasibility of using cloud storage.
  • Vendor Reliance: Organizations using cloud storage are dependent on the cloud service provider. Any issues with the provider could potentially affect the PLM system’s availability and performance.

Ultimately, the choice between on-premises and cloud hosting for PLM systems depends on the specific needs, preferences, and resources of the organization. Some companies might opt for on-premise solutions due to data control and compliance requirements, while others might prefer the flexibility and cost-effectiveness of cloud-based systems for easier collaboration and scalability.

We haven’t explored an additional option for cloud hosting in this article. (SaaS) However, as PLM experts, we have found that for the majority of our clients, these two options currently offer the most value for organizations looking to scale their operations. At Applied CAx, we are versed in both deployment strategies and our qualified team is here to help you determine and implement the best strategy for you. If you are looking for more information on PLM administration, implementations, or PLM solutions, please contact us.

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