Cloud-based Manufacturing • June 2, 2021

Cloud-Based MES vs On-Premises: 5 Factors to Consider

MES On-Premises vs. Cloud: 5 Factors to Consider
Anyone considering a Manufacturing Execution System (MES) purchase or upgrade today is likely also considering where to implement. Should you install a cloud-based MES or On-Premises? Much has been learned during the global pandemic. New priorities have emerged that challenged this question. The truth is that a hybrid option might prevail as the best of both worlds – but we’ll leave that topic to another post. For now, let’s take a closer look at the pros and cons of MES On-Premises vs Cloud to help your decision process.

Cloud technology became prevalent because of its flexibility and affordability. In a recent survey conducted at the end of 2020, 34 percent of manufacturers shared they already run their MES on the cloud; another 29 percent indicated they were planning to move to the cloud within the next two years (source). This trend is impacting other enterprise applications, including Enterprise Resource Management (ERP) and Product Lifecycle Management (PLM).

As you evaluate your path forward, the decision of a cloud-based MES vs On-Premises brings unique advantages to each option. Which is right for you? Here’s a quick look at five key factors your enterprise should consider.

1. Accessibility

A cloud-based MES makes it easy to access applications via the Internet. Provided your internet connection is reliable, others in your organization will have greater access and visibility to the data surrounding your operations performance. Further, those working remotely – which is widely expected to continue post-pandemic – will have a greater ability to do their job and respond faster to unexpected disruption.

2. Up Front Costs

On-premises solutions will require more up-front capital to install servers and run security and maintenance protocols. However, over the lifecycle of your solution, these costs are spread over the life of your application, so can be better justified – provided a long lifecycle can be justified. But what is the expected useful life of an MES? A decade ago, that might have been 10, 15, or 20 years. Today’s technology innovation cycles have compressed which can have a big impact on how you calculate the cost of ownership.

3. Security

Traditionally, on-premises systems have been viewed as the most secure choice. That still may be true in some cases, but cloud security has improved significantly in recent years. A cloud-based MES solution hosted by any of the big three vendors (AWS, Azure, Google Cloud) can offer stringent standards that would impress even the most security-minded companies.

These big cloud providers have added secure cloud options, such as AWS GovCloud, which takes care of many regulation and compliance requirements at the infrastructure level.  As handling compliance is a huge task for the enterprise IT level, leveraging a cloud provider has become an attractive option for a lot of enterprises.

Lastly, while an on-premises MES can potentially provide superior data control and protection behind an enterprise firewall, you will still need these systems to be accessible remotely. Unless you are confident your organization has the necessary knowledge and resources to secure your data and communications over time, it may be safer to trust the modern, advanced security of a cloud-based MES.

4. Ongoing Maintenance

There’s no doubt a cloud solution is easier to initially deploy given there is no need to identify IT resources, purchase host servers, or go through a comprehensive architecture analysis, given there will be fewer customization options to consider. If your requirements include a mandate for a custom, one-off solution, an on-premises solution is your best option.

Here is where you need to decide if the glass is half-full or half-empty?

With less customization than is typical with a cloud MES, future product upgrades and feature additions will be much easier to accommodate. Not only will your initial deployment go faster and easier, so too will the ongoing maintenance. Much of the challenge with maintaining an enterprise application is the ongoing integration maintenance required to keep all your ERP, PLM, and other systems connected – these challenges go away if your MES application has a cloud-native architecture with embedded APIs that remain connected despite the addition of new features or capabilities.

5. Scalability and Flexibility

If future scalability and flexibility are important criteria in your search for a new MES, the cloud has many advantages. Especially when your application has a microservices architecture. If you need server power, you can adjust to adding more. With an on-premises MES, you may be stuck with the systems that you have in place.

Finally, consider the amount of data you’ll be storing. A fully digitized manufacturing plant produces vast amounts of data, much of which you’ll need to store and access. Make sure you have a handle on data storage demands before you commit to a fully on-premises solution.

What’s Best for You?

Manufacturers of complex products may need specialized and heavily integrated on-premises solutions for MES. Smaller organizations that place greater emphasis on operational agility and future growth may be better suited with a cloud MES. Upfront costs and resource requirements are minimized, and the cost can be managed as an operations expense vs. an upfront capital cost.

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