Box, on-prem, cloud (software delivery models)

Software delivery formats

A software delivery format is the way in which software is distributed and installed on computers or systems. These formats can vary depending on the type of software, the platform it is meant to run on, and the specific requirements for installation or deployment.

Today there are three main approaches in the software industry:

1. Boxed software (Box) — purchasing a one-time "lifetime" license to use the program.
2. On your own servers (On-premise, on-prem) — a subscription model in which the software is installed and runs on the client's servers.
3. Cloud software (Cloud) — access to the program by subscription, requiring regular payments.

Box (boxed version)

The "Box" delivery format, or boxed version, is the classic approach: the program is supplied in physical packaging or electronically. The first versions of software (operating systems, office suites, games, and so on) were distributed precisely as a "box." Even today, when selling software, many vendors still present their product as a box containing a disc and a user manual.

The essence of the approach is that the user purchases a floppy disk, CD, DVD, or USB flash drive containing the program's installation files. After installing the program and activating it by entering a serial number, if the program is paid, the user gains the ability to use it.

Advantages of the boxed version:

1. Cost savings in the long run. A one-time purchase of software can prove more economical than periodic payments for its use over time.
2. Guaranteed data security. Access to the information in the software is limited to the buyer and the users connected to its server. This ensures data security and full control over the data, provided the client has taken measures to protect its servers.
3. Program customization. By purchasing the boxed version of a program, the client effectively becomes its owner, which gives them the ability to configure and refine the product to suit their own needs with the help of in-house specialists or third-party developers.

Disadvantages of the boxed version:

1. High cost. The initial purchase of software can be a serious financial burden for small businesses because of the high one-time cost. It is also important to keep in mind that a large upfront payment does not rule out future expenses for developing additional features or buying updates from the developer.
2. The need to acquire servers. Installing the boxed version of the software requires buying or renting a high-performance server, as well as spending time on its setup. It is also critically important to protect the server so that access to its data is possible only for users on the internal corporate network.
3. Lack of remote access. When the software can only be accessed from the office, this can create inconveniences.

On-prem

The on-premise model (on-prem for short) combines the advantages of the boxed (box) and cloud versions: a subscription payment model with data storage on your own servers.

If it has powerful hardware resources, a company can choose to deploy the software in an on-prem format, which requires having its own server. However, it is also possible to use a rented machine, such as IaaS, VPS, or dedicated servers located outside the company.

A key advantage of hosting software on rented platforms is that it frees the company from the costs of support, updates, maintenance, and electricity for the server hardware. The only main concern is paying the server rent on time.

Advantages of on-prem:

1. Control. Organizations have full control over their data, hardware, and software. This is especially important for companies with high requirements for data security and confidentiality.
2. Customization. Because the software is installed directly on the client's own server, it can be thoroughly tailored to the specific needs of the business.
3. One-time costs. In many cases, purchasing an on-prem software license involves one-time costs, unlike subscriptions to cloud services, where payments are made on a regular basis.

Disadvantages on-prem:

1. Initial costs. High initial costs for acquiring servers, hardware, and software licenses, as well as expenses for building and maintaining IT infrastructure.
2. Maintenance and support. The organization is solely responsible for maintenance, updates, backups, and disaster recovery, which requires having qualified IT specialists.
3. Scalability. Scaling up the infrastructure to support growth or changes in the business can be complex and expensive.
4. Immobility. The physical location of the infrastructure limits availability and mobility, unlike cloud solutions, which are accessible from anywhere with an internet connection.

Cloud (cloud version)

The "Cloud" delivery format, or cloud version, is a way of providing software, services, and data over the internet. In this case, the software and all the necessary resources are stored on remote servers (in the "cloud"), and users access them through a web interface or applications. This approach makes it possible to avoid having to install and run applications directly on users' local computers.

Advantages of the cloud version:

1. Quick start. The provider hosts the software on high-performance servers, guaranteeing high performance and data protection. There is no need to acquire your own servers and deal with their setup. The client can sign up instantly and start working with the program right away.
2. Access from anywhere. Users are able to connect to the program online immediately. This option for remote access helps increase the flexibility and mobility of the staff's work.
3. Feature updates. The provider's development team works continuously to improve the software product. Program creators pay attention to users' needs and actively collect feedback. This means that even if a certain feature is currently missing from the program, there is a high probability it will be introduced soon.
4. Technical support. It removes the need to bring in external technical specialists or hire them to resolve technical malfunctions. If problems arise while using the software, the provider's technical support service will offer help and answer any questions.

Disadvantages of the cloud version:

1. Final cost. Over time, the total amount of expenses can turn out to be significant. In the long run, the client will pay more to use the program than if they had chosen to buy the boxed version.
2. Risk of data leakage. It is important to rely on the provider's reliability when storing all corporate information on its servers. Data security can be compromised, and access to the software can be restricted.
3. Limited functionality. Users do not have the ability to make changes to the program's code, which limits their ability to personalize the product. All requests to modify functionality require the provider's approval and implementation.
4. Dependence on the internet. If there is no internet, the user loses the ability to use the program and to access their data until the connection is restored.

Conclusion

You should choose the way the program is delivered based on your financial means and the specifics of the software being acquired.

Core computer programs (such as operating systems, office suites, graphics editors, and specialized industry-specific software) are often better purchased in physical form, that is, in a "boxed" version.

For business-oriented software — for example, online survey services, electronic document management systems (EDMS), customer databases (CRM), business process management (BPM) systems, and accounting programs for small and medium-sized businesses — the cloud version is most often suitable. For large organizations, both "boxed" solutions and installation on their own servers (on-premises) will work well.