What is the Difference Between a Cloud Application and a Hosted Application?

These days, many businesses have their heads in the cloud. No, we’re not talking about daydreams but instead cloud-based applications. In short, “the cloud” is the future, and the future is now with cloud solutions replacing many on-site and hosted software applications.

However, there are so many software solutions available that it can be difficult to hone in the system that is right for you and your company. Not only that, but until recently, most software had been hosted on-site. Now, many software platforms are being offered through the cloud. For instance, many companies are moving their ERP to the cloud.

This has led to both simplicity and confusion. To illustrate, why should you choose one over the other? And, what’s the difference between cloud-based applications and hosted applications? These questions confuse many customers, so let’s dig in.

What are hosted applications?

Hosted software generally refers to “on-premise” software. Yet, the servers themselves may not be operated on the premise of the business receiving services, but instead by the vendor and on behalf of the customer. In some cases, the servers may be on site as well. What’s important here is that the software is stored and run on dedicated servers.

Such hosted software is not designed to operate in a truly native cloud environment. Hosted software is much more akin to the software found on your personal computer. Nonetheless, cloud-hosted software can be made available remotely.

Now, you might be thinking that “dedicated” software is better than cloud software. After all, cloud software is a uniform solution distributed to everyone with a login. Isn’t it better to have your own software and services dedicated specifically to you? Perhaps in some cases, but not in most cases.

Hosted applications can have several downsides. Many of these detriments stem from the fact that hosted software must be manually managed. For example, software developers are constantly tinkering with and developing their products. With hosted software, when updates are offered, you will have to upgrade them manually.

It can longer to set up hosted software, and the setup process itself can get quite costly. Moreover, should your company’s demand for the software exceed the dedicated servers, you’re going to have to buy new hardware. If you’ve ever shopped around for servers, you’ll know that they are not cheap.

Yet, hosted applications are the preferred choice for companies who must comply with strict data privacy regulations and need complete control of their data. If your company must abide by complex regulations, then a hosted application may be your only option.

What are cloud-based applications?

Cloud-based applications aren’t just based on the cloud, they live, breath, and operate in the cloud. They are designed from the basic code up to take full advantage of the cloud infrastructure. As a result, cloud “native” apps often run better and more reliably. The most popular use of cloud applications is for file storage. Most companies could use more storage.

Most cloud-based applications are offered through the Software-as-a-Service model. You simply pay a subscription fee, and then you can gain access. You don’t have to host anything or do anything on your end. Instead, you simply enjoy the service of your software.

Most of the processing is handled “server-side” meaning by the host company. Your PC will then render the service on your end. In other words, getting started and staying up and running is easy as pie. In fact, spending on cloud services has already overtaken spending on cloud infrastructure.

Digging into the benefits of cloud software

We’ll be honest, we’re partial to cloud-based applications, however, this partiality is quite impartial. We prefer cloud-based applications because they perform better in nearly every circumstance. Our preference is thus pragmatic rather than emotional or dogmatic.

With cloud-based applications, the client doesn’t have to do much beyond paying your subscription fees and learning how to use the platform. All the updates, maintenance, and everything else are handled by the SaaS provider. The shared code-base makes updates much easier and more seamless as well.

Furthermore, implementation times are basically non-existent. Pay your subscription, sign up, log in. Of course, every software platform has a learning curve. Fortunately, many SaaS providers offer fantastic online communities and other support features, which makes learning easy.

If and when you have to expand access, you can skip new servers and simply increase your subscription. This means new staff members can log on quickly and get to work.

Addressing the cloud “security” myth

One of the major myths with cloud services is that they are not as secure as hosted applications. For most companies, and in most situations, this couldn’t be further from the truth. Most cloud-based applications are protected by a huge range of security protocols that have been implemented by professionals.

In addition, the software itself is always up-to-date. It’s hard to underestimate just how important this is. Many of the biggest cybersecurity hacks have been because of out-of-date software. Developers release security patches, but then the on-premise software isn’t updated. This leaves a gap. Eventually, a hacker finds that gap and takes advantage of it.

Not with SaaS and cloud-based applications. The updates are handled by the vendors themselves. Given that their entire livelihood depends on safe, secure, and stable software, you can rest easier knowing that they are working to keep everything as up-to-date as possible.

Conclusion: cloud-based apps are the future and hosted applications still have a place

Ultimately, cloud-based applications are becoming the preferred choice. Part of it is due to economy of scale. It’s simply more cost-effective to run huge server farms that can service countless large clients, rather than having each client host applications themselves.

Bandwidth also makes it easier to deliver cloud apps via standard Internet connections. Moreover, security threats have made it necessary for vendors to update software automatically and consistently, rather than allowing customers to update it manually.

For these reasons and more, cloud-based applications are becoming the preferred choice for most solutions. On the other hand, hosted applications still have a place for companies that need full control of their data.