If you are a retail store owner and you are looking forward to purchasing a new Point of sale software for business, you have to make a decision between cloud-based and on-premise software. Getting a new POS system is to make a significant investment of time, energy as well as money. Hence it is important to have proper research to get the best option.
In this article, we will explore the differences along with the pros and cons of both types of software.
Traditional POS system
The traditional POS systems are also known as a legacy or on-premises POS that store data on the local database. It can be stated as similar to the storing of a report or document on the desktop computer that cannot be accessed from any other place.
Pros of traditional POS system:
1) Offline working
- The traditional POS terminal is your PC with the data stored in it. No internet is required to get full functionality. The data can also be accessed and stored on the server without the requirement of the internet.
- It is because the traditional POS has stayed around for a while.
3) Downloadable data
- The sales data can be easily exported to the excel sheets for accounting purposes without any extra requirement.
Cons of traditional POS system:
1) Difficult to make changes
- It is difficult to make changes in the table layout, price, and menu. Many times you have to mail the POS Company to make the required changes and wait for 2 to 3 working days.
2) No mobility
- The traditional POS is fixed at the places i.e. fix positions. It basically means, you either need more staff over the fixed positions or your staff needs to keep running back and forth between the counter and customers.
3) Limited sales insights
- Most of the traditional POS shows the bestsellers and the quantities. They are not capable of showing the data analytics.
4) Old technology
- The traditional POS runs on old technology that is difficult to integrate with other systems. Also, the updates are made rarely.
5) Susceptible to virus
- As the traditional POS is like a basic computer, it is an easily vulnerable virus. As a result, you may face disrupted system performance, sapping computer memory and frequent computer crashes.
6) Frequent backups
- Any of the problems may result in the loss of locally stored data in the hardware. As a result, frequent backups are required to ensure the safety of data. You have to constantly back up the data manually to the hard drive.
Cloud-based POS system
- On the other hand, the cloud POS systems store the data in the cloud i.e. the data can be accessed from anywhere through the device having internet connectivity. For example Google Drive, Dropbox store data.
- Normally “cloud” and “SaaS” are often used alternatively but it is important to understand that there exist hybrid cloud systems that are not 100% cloud-hosted. Such is different from SaaS that is a true cloud-native application; the software has a licensed subscription and is centrally hosted. Central hosting makes SaaS cost-effective and easier to maintain compared to other solutions.
Pros of cloud-based POS software
- Most cloud-based POS can analyze the data and identify the patterns. By comparing the generated data with past data, you can understand whether the new strategy or promotion is working or not.
2) Frequent updates
- Updates and upgrades are important to keep the software running smoothly and include new features. The cloud-based software is easy to update.
4) More functions
- Cloud-based systems come with more functions such as staff clock in, clock out, table queues, and many more.
5) Easy editing
- The menus, offers, discounts, packages, arrangements, prices can be easily edited with the cloud-based POS.
Cons of using cloud-based POS
1) Need to stay vigilant
- It is required to stay vigilant and make sure that devices stay charged especially if more than one device is used.
2) Expensive additional costs
- If you get the POS software from the distributor and not directly from the company itself, you face additional costs such as training, installation, and technical support. The charges are decided per visit by the distributor.
Main points of difference in Traditional and cloud-based POS software
- The on-premise POS software has disadvantages when it comes to data accessibility. As the data is stored on a local server, it can only be accessed through the local site.
- Whereas in cloud-based POS Software, the data can be accessed from any place through any device having an internet connection.
- The on-premise POS software requires a high upfront investment. If the additional costs such as maintenance, hardware, and re-installation are added they are at the upfront fees. These can seem expensive unless they are used for a longer time.
- Whereas the cloud-based software requires very little investment, you can opt for monthly subscriptions. As the updates are handled automatically by the Cloud POS provider, there are minimal additional costs.
- The traditional POS software needs to be updated manually and may need on-site technical team support. It can take up additional costs.
- Comparatively, the cloud-based POS software can get the benefit of real-time updates. The updates make your software future-proof as the solution keeps improving every time.
- On-premise POS software requires specific hardware devices to be used. If it is due to the licensing fees to be paid per device that uses the software.
- On the other side, the cloud-based POS software is not tied to any specific hardware; it can be used on any operating device. It can also be accessed from monitors, iPads, or mobiles.
- As the data is stored on the local server in the traditional POS software, there stays a risk of losing the data if the system crashes or catches a bug.
- On the other side, the cloud POS software automatically stores data securely in the cloud storage. The reliable POS providers use reputed cloud hosting services for better performance.