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Online Document Management System Vs On-Premise Document Management System, What's The Difference?

Published on 06 December 16
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Online Document Management System Vs On-Premise Document Management System, What's The Difference? - Image 1

The document management system(DMS) is essential for every organization for the smooth flow of the work. The Online Document Management System and the on-premise document management system are the two methods that are used commonly by many organizations.



Online Document Management System vs. On-Premise Document Management System

This system is the cloud-based data management system. The data is stored on the centralized cloud which can be accessed with the help of Internet. The data stored in the cloud is live on the provider’s server. The storage space is made available as per the user requirements.

This is the most conventional way to keep the data managed by the company. It includes the data server installed on-site with the rest of IT infrastructure. This system runs on software that is installed on the dedicated servers.



What Is The Average Cost?

Online DMS

The cost for the online DMS changes according to the requirements. The service providers offer the wide variety of packages ranges from basic to all-inclusive.


For example, some providers propose packages in three types.


1.Basic Package

It provides simple folder-based management of the data.


2. Pro Plus Package

This package provides folder management along with the email management and customization.


3. Enterprise Package

It delivers services for management and customization of emails and folders to the multiple users.


As the company moves through the packages to avail the extra features and additional capacity, the cost for online DMS keeps increasing. The total investment for online DMS includes monthly/yearly fees for maintenance, security, and periodic license update.

For the big organizations, it will cost up to $15 to $45 per person per month.


On-Premise DMS

Things are the little bit different for the cost of the on-premise DMS solutions. In online DMS additional features increases the cost while for on-premise DMS additional hardware requirements for the on-site system will increase the cost. Different things require its own servers. For example, mobile access, file sharing and synchronization, email management and more requires different servers.

For on-premise DMS at absolute minimum need, it requires one application server and one indexing server solution to work at basic level. In this case, there are three major elements regarding with the total cost.

Hardware Cost

Depending on the what features company is going to subscribe, the cost for hardware changes. More the features, more the hardware company has to purchase.

On an average, it will cost $5000 per device for the appropriate number of servers.


Licensing Fees

This fee includes the server and desktop licensing fees. This fees will cost up to $300-$400 per person on an average.


Maintenance Fees

The annual maintenance and ongoing support for the server can cost up to $40 per person on an average.


The above scenario does not include software upgrade cost for the on-premise system on which the hardware and servers are running. It requires additional cost for the desktop and server software update for the latest version.


Implementation Cost (User’s Expectation)

Besides the licensing cost, the implementation cost adds up extra budget for both Online Data Management System and on-premise DMS. Based on the size of the organization, the actual implementation cost changes for the DMS system.

The nature of the project for which DMS is required decides the overall implementation factors. Taking all these factors in mind, DMS is designed according to the requirements for the project.

The development of DMS includes following phases.

  • Designing
  • Planning
  • Testing
  • Deployment
  • Training and
  • Follow-up Support
From the basic project needs to complex projects, the duration to develop the DMS varies. The duration of 2-3 months is generally expected to develop complete DMS. The testing and training phase require few extra time. Because in this phase, providers look for the bugs and issues in software.

The cost for complete development and testing cost add extra thousand dollars to the budget and the labor charges are not included in this.


Security Level

Most of the company’s concern is about the security of the important data which they handle.

  • Security Level Of On-Premise DMS

The on-premise DMS handles all the data on the remote physical server. These physical servers are located within the infrastructure of the company. The security level of this DMS is high because it has less chances to be hacked as the company has strong control over the physical servers.


But, in rare case scenario, the disasters like server crashing and fire can cause damage to precious data of the company.


  • Security Level Of Online DMS

As the data is stored on cloud storage, the chances of hacking of this data are high. Fortunately, some reputed providers offer strong encryption algorithms to the data to prevent it from unauthorized access. The data on cloud storage is safe from disasters like data corruption and fire.


There are lots of considerations while choosing for Online File Management System or on-premise DMS solutions. By focusing on the overall implementation cost, technology and security factors company chooses the effective DMS solution on which it can work seamlessly.













































Online Document Management System Vs On-Premise Document Management System, What's The Difference? - Image 1

The document management system(DMS) is essential for every organization for the smooth flow of the work. The Online Document Management System and the on-premise document management system are the two methods that are used commonly by many organizations.








Online Document Management System vs. On-Premise Document Management System

This system is the cloud-based data management system. The data is stored on the centralized cloud which can be accessed with the help of Internet. The data stored in the cloud is live on the provider’s server. The storage space is made available as per the user requirements.

This is the most conventional way to keep the data managed by the company. It includes the data server installed on-site with the rest of IT infrastructure. This system runs on software that is installed on the dedicated servers.








What Is The Average Cost?


Online DMS

The cost for the online DMS changes according to the requirements. The service providers offer the wide variety of packages ranges from basic to all-inclusive.

For example, some providers propose packages in three types.





1.Basic Package

It provides simple folder-based management of the data.





2. Pro Plus Package

This package provides folder management along with the email management and customization.





3. Enterprise Package

It delivers services for management and customization of emails and folders to the multiple users.

As the company moves through the packages to avail the extra features and additional capacity, the cost for online DMS keeps increasing. The total investment for online DMS includes monthly/yearly fees for maintenance, security, and periodic license update.

For the big organizations, it will cost up to $15 to $45 per person per month.





On-Premise DMS

Things are the little bit different for the cost of the on-premise DMS solutions. In online DMS additional features increases the cost while for on-premise DMS additional hardware requirements for the on-site system will increase the cost. Different things require its own servers. For example, mobile access, file sharing and synchronization, email management and more requires different servers.

For on-premise DMS at absolute minimum need, it requires one application server and one indexing server solution to work at basic level. In this case, there are three major elements regarding with the total cost.


Hardware Cost

Depending on the what features company is going to subscribe, the cost for hardware changes. More the features, more the hardware company has to purchase.

On an average, it will cost $5000 per device for the appropriate number of servers.

Licensing Fees

This fee includes the server and desktop licensing fees. This fees will cost up to $300-$400 per person on an average.





Maintenance Fees

The annual maintenance and ongoing support for the server can cost up to $40 per person on an average.

The above scenario does not include software upgrade cost for the on-premise system on which the hardware and servers are running. It requires additional cost for the desktop and server software update for the latest version.





Implementation Cost (User’s Expectation)

Besides the licensing cost, the implementation cost adds up extra budget for both Online Data Management System and on-premise DMS. Based on the size of the organization, the actual implementation cost changes for the DMS system.

The nature of the project for which DMS is required decides the overall implementation factors. Taking all these factors in mind, DMS is designed according to the requirements for the project.

The development of DMS includes following phases.

  • Designing
  • Planning
  • Testing
  • Deployment
  • Training and
  • Follow-up Support
From the basic project needs to complex projects, the duration to develop the DMS varies. The duration of 2-3 months is generally expected to develop complete DMS. The testing and training phase require few extra time. Because in this phase, providers look for the bugs and issues in software.The cost for complete development and testing cost add extra thousand dollars to the budget and the labor charges are not included in this.


Security Level

Most of the company’s concern is about the security of the important data which they handle.

  • Security Level Of On-Premise DMS
The on-premise DMS handles all the data on the remote physical server. These physical servers are located within the infrastructure of the company. The security level of this DMS is high because it has less chances to be hacked as the company has strong control over the physical servers.

But, in rare case scenario, the disasters like server crashing and fire can cause damage to precious data of the company.

  • Security Level Of Online DMS
As the data is stored on cloud storage, the chances of hacking of this data are high. Fortunately, some reputed providers offer strong encryption algorithms to the data to prevent it from unauthorized access. The data on cloud storage is safe from disasters like data corruption and fire.

There are lots of considerations while choosing for Online File Management System or on-premise DMS solutions. By focusing on the overall implementation cost, technology and security factors company chooses the effective DMS solution on which it can work seamlessly.

This blog is listed under Development & Implementations and Data & Information Management Community

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