“On-prem or cloud” is the wrong question for most companies to be asking today.
It seems like software companies can’t stop talking about the cloud. If you send communications to any customer base in any industry, you probably already know the basic difference between on-prem and cloud applications (if not, don’t worry — we’ll remind you later in this post). The part that gets a lot less attention, especially in customer communications management (CCM), is the difference between cloud-hosted CCM and cloud-native CCM software.
We think it’s a really important distinction when you’re choosing a CCM platform, but it isn’t heavily discussed. So here’s the breakdown of the differences and our take on why it matters for your CCM.
On-prem vs. cloud-hosted vs. cloud-native SaaS for customer communications management (CCM)
Most CCM is still run on-premises (not in the cloud) — but most cloud CCM software is cloud-hosted, not cloud-native. The difference matters: Cloud-native software is built for the cloud, while cloud-hosted software is essentially retrofitted to run in the cloud. Cloud-native software works more efficiently and gets better ROI than cloud-hosted software, especially in the long run.
Cloud-hosted CCM software wasn’t made to run in a cloud environment, so it can still have a lot of the same problems on-prem software has. Cloud-native CCM software was specifically architected for cloud, so it’s designed to get the most out of cloud deployment (like cost savings, fast upgrades, smooth API integrations, easy scalability, and unique CCM features).
First, a quick level-set just to define some key terms:
- On-premise CCM software is software that runs in a local data center with physical server infrastructure, which is usually run by the company using the software.
- Cloud-hosted CCM software is software that was created to run on-premise that’s been moved to cloud infrastructure.
- Terms like “cloud-based” or “cloud-enabled” are widely used as marketing terms for software that runs in the cloud, but wasn’t made for it. Basically, all cloud-native software is hosted in the cloud, but not all cloud-hosted software is cloud-native.
- Cloud-native CCM software is software that was designed from the start to live as cloud software.
- Cloud-native software takes advantage of the unique architecture and capabilities of cloud, which can be a game-changer for companies that need flexible, secure tools.
|
Factor |
On-Prem CCM |
Cloud-Hosted CCM |
Cloud-Native CCM |
|
Pros |
Tighter control over your tooling because you control the infrastructure (hardware, maintenance, etc.) |
Less effort for the vendor to design since it fundamentally still works like on-prem software |
Designed specifically to get the most out of cloud architecture (elasticity, security, integrations, etc.) |
|
Cons |
High maintenance burden (difficult and costly to upgrade in terms of both hardware and resources) |
Monolithic software can still be difficult to scale and maintain, even in the cloud, because it doesn’t necessarily change the fundamental on-prem architecture |
Requires more effort for software vendors to redesign, since microservices and containers require more than a “lift-and-shift” approach |
|
Where is it? |
Hosted on your local servers |
Hosted on cloud servers (either private or public) |
Hosted on cloud servers (usually public) |
|
How scalable is it? |
Hard (usually requires hardware upgrades) |
Faster than on-prem but less flexible than cloud-native (often uses more resources than you actually need) |
Very easy, with automatic scaling up and down with microservices and containers |
|
How expensive is it? |
Very expensive, both in up-front launch and in long-term operating costs (like maintenance, hardware, and an internal IT team to manage it) |
Lower cost in the short term, since subscription models avoid major initial expense, but its inflexibility leads to overspend in the long term |
Equivalent to cloud-hosted in the short-term and much more cost-effective in the long-term; easy scalability means you only pay for the resources you need |
|
How difficult is it to maintain? |
Hard: Requires internal maintenance of physical servers, manual upgrades, dedicated expertise and project teams |
Often just as difficult as on-prem, since it's the same structure as on-prem |
Automated and streamlined: Cloud-native architecture makes DevOps, Agile, and CI/CD software development practices easier, so vendors can make updates, upgrades, and fixes much faster with less impact on customers |
|
What unique features can it have? |
Maximum control over data security and location |
None that aren’t also possible or better with cloud-native software |
Elastic scaling, efficient microservices, smooth software updates, and secure data isolation that non-native cloud-hosted software can’t match |
|
How hard is it to secure? |
High difficulty: You’re responsible for the security of your software, from tooling to processes and staffing |
Moderate difficulty: You share responsibility with your software vendor and the cloud provider it uses |
Lower: Security is built into cloud-native software by design, with isolated services and logical separation reducing the number of attack surfaces |
Should you be running your CCM in the cloud? (Yes)
More than 63% of customer communications management software is run on-prem. If you’re in that 63% and asking, “Should we be running our CCM in the cloud?” you probably already know the answer is yes.
But in our experience, ‘cloud vs. on-prem’ is the wrong question to be asking today. Let me explain what I mean by that.
It seems like every software company in the world wants you to know the difference between on-premise and cloud applications. Which makes sense: The dawn of cloud computing was a legitimate sea change in how work gets done across every industry. You really can’t overstate how much more efficient and flexible the cloud is — not to mention the lower barrier to entry for smaller organizations (compared to the high costs of in-house servers or data centers).
In a rush to capitalize on the hype of cloud, software companies moved their offerings quickly (in a lower-effort method known as “lift and shift”) and marketed their new offerings as a revolution. They promised that the faster you get to the cloud, the faster you’ll start seeing the benefits.
Early case studies of cloud-hosted software touted cost savings, business agility, and a host of other buzzwords. For the most part, it worked: After decades of slow adoption, the 2020 pandemic was a time of huge cloud adoption across industries, driven by an explosion in remote work.
Software vendors saw an opportunity to market cloud versions of their product to capitalize on investor interest — but like any hype cycle, the reality of cloud turned out to be more nuanced than many vendors had promised. And so, cloud adoption was followed by a limited-but-gradual reversal phenomenon known as cloud repatriation.
Why so many software vendors want you focused only on ‘on-prem vs. cloud’
Back to the point: Cloud-hosted software is only a compelling prospect when compared to on-prem, so vendors who make cloud-hosted software lean into that comparison. That way, they don’t have to compare their cloud-hosted software to better, more competitive cloud-native alternatives.
Think about it: The difference between on-prem and cloud CCM tools was truly a paradigm shift (especially for companies moving from 20- and 30-year-old legacy CCM software), so the differences and benefits are more immediately apparent and don't require much nuance to understand.
- Going from on-prem to cloud is like going from a bicycle to a car: It’s got more wheels, it’s more efficient, it’s more effective, and if you don’t choose wisely, it can have a higher risk factor.
But cloud-hosted and cloud-native CCM software are in the same broad category of tools, so the differences and benefits between them are more nuanced. Cloud-hosted vs. cloud-native is a huge differentiator in terms of the cost, flexibility, and security of cloud software — but from the outside, it feels like less of a game-changer.
- Choosing between cloud-hosted and cloud-native tools is like choosing between a basic car and a custom ride: It’s got the same number of wheels, it still runs on gas, and it’ll get you where you need to go, but it's safer, more efficient, and easier to maintain because it was made for your needs. (Either way, it’s still better than a bike.)
Here’s the secret many CCM vendors don’t want you to know: Dig any deeper than “on-prem vs. cloud,” and you’ll find that not all CCM software in the cloud is created equal.
Why the difference between cloud-hosted and cloud-native matters more than on-prem vs. cloud
Even if they’re closely related, cloud-native software has a bunch of great benefits over cloud-hosted software, and customer communications in particular is an area where a cloud-native platform really shines.
Here are a few very specific reasons why.
Cloud-hosted CCM software isn’t as flexible, configurable, or secure as cloud-native CCM software.
Cloud-hosted software doesn’t really take advantage of the things that make cloud infrastructure great. With cloud-hosted software, you can easily end up paying for the whole system every time only one part of it needs to change, scale, or be secured. With cloud-native software, you pay (and take risk) only where your business actually needs it.
To explain why, we’ve got to get a little technical. Sorry! I've sprinkled in an example to bring it back down to earth.
See, microservices and containers (two concepts central to modern cloud-native application design) can technically run anywhere — but the defining difference is that cloud-native architectures are intentionally designed around these patterns. Cloud-hosted systems typically aren’t built for them, so they don’t get the best elasticity, modularity, and automation of cloud-native design. (In case you’re curious, it’s possible but just not practical to try them with on-prem infrastructure.)
Now, most cloud-hosted software that’s not cloud-native acts like one big machine with dependent parts, bundling major capabilities into shared application tiers or runtimes. Many components of a cloud-hosted CCM platform — template design, data ingestion, rules and logic, document composition, output rendering, delivery, and archiving — are all deployed, scaled, upgraded, and failed together. Unless they have independent lifecycles and autoscaling logic (which most don’t), they’re all pulling from the same resource pool.
Cloud-native SaaS architectures, on the other hand, are intentionally designed around microservices and containerization. In cloud-native SaaS, individual microservices are hosted in their own containers. They’re built for that shape, rather than retrofitted.
Here’s an example of cloud-hosted vs. cloud-native scaling in a customer comms scenario
When you have a spike in email delivery, it puts your delivery component under additional load.
With cloud-hosted CCM software, delivery is dependent and tightly coupled with other services that have to scale up with it — and that scaling affects capabilities unrelated to delivery. To finish the job, you might need to scale the entire CCM environment, including composition, rules, and template engines, even if the delivery engine is the only part that really needs scaling up. Same with configuration and security: What happens to one part of the system usually needs to happen to the rest.
With cloud-native CCM software, each part can easily scale independently while working alongside the rest of the components in the platform. They can more easily use those technologies for elasticity, modularity, and automation. Going back to the email example from earlier, your delivery engine can handle that email spike without dragging composition, rules, and template engines with it.
Cloud-native CCM software can consolidate fragmented customer comms tools.
Fewer than half of all marketing and CX managers are using a unified platform for CX, and 47% of those same managers say that being unable to integrate their tech systems is holding them back. In a 2023 survey, CCM professionals cited “piecemeal” technologies as their number-one CCM challenge.
A lot of CCM was custom-built over years (or decades). When a toolchain is built to work a certain way and generations of teams are taught to use it that way, it’s easy to gloss over the drawbacks of long, complicated toolchains.
After all, it’s the way you’ve always done it! As long as it doesn’t break down, you should be fine, right?
But in the modern era, there are real, dollars-and-cents implications for maintaining big, siloed toolchains for CCM. In 2024, 38% of companies said they lost customers because of poor collaboration on their teams.
Cloud-native CCM solutions like Elixir Cloud let your teams work together with secure data ingestion, role-based permissions, collaborative workspaces, built-in feedback tools, and customizable review cycles that replace the friction of long toolchains with the smoothness of shared, centralized tooling.
Cloud-native CCM software has better ROI than cloud-hosted CCM.
The benefits of cloud-native software mentioned above, like elastic scaling, mean cloud-native CCM software costs less in the long run than cloud-hosted, lift-and-shift software. Maintaining legacy software, like the kind that gets retrofitted to run as cloud-hosted software, eats up 70% of an organization’s IT budget on average.
It’s harder to quantify the value of cutting down on manual approvals, as cloud-native CCM platforms can do. But teams that struggle with never-ending approval cycles and scattered feedback know it can be one of the most bloated parts of a CCM workflow.
Cloud-native CCM software helps improve CX.
Comms teams are no strangers to IT roadblocks and legacy tech. In fact, surveys have shown they’re the two most significant barriers to adopting or improving personalization.
It’s pretty easy to connect the dots on this one:
- Great personalization is key to customer comms success.
- Legacy CCM systems, including the data sources and delivery mechanisms that help you personalize, are hard to let go of.
- Cloud-hosted CCM software isn’t made to integrate with those systems smoothly.
- Cloud-hosted CCM software doesn’t necessarily make personalization easier by virtue of being hosted in the cloud.
- Cloud-native CCM software IS made to integrate with them smoothly via API, opening up many more use cases for customer communications management.
- Cloud-native CCM software makes personalization easier.
- Cloud-native CCM makes CX better.
Elixir’s cloud-native differentiators: Why it’s important to choose cloud-native software for CCM
Customer communications management in particular is an area that could see so much improvement with the right choice of tools.
As long as there have been customers, there have been customer communications. The ways companies manage those communications have changed (especially in the 40+ year history of Elixir), but a lot of the same struggles have followed them through the years:
- You have to wait for the next data batch to send communications
- You can’t personalize a document while writing and designing it
- You have to corral feedback from different departments through different channels
- You have to make one person a bottleneck so nobody else has access to customer data
You get the point.
When we took a look at those challenges, we knew we had to build Elixir Cloud as a truly cloud-native platform. We took what we learned from creating CCM software for decades and built the best of it in the cloud. As a result, Elixir Cloud is scalable, secure, collaborative, and it lets you use your existing data sources for faster, more efficient comms operations.
Here’s what makes Elixir Cloud different from run-of-the-mill cloud-hosted CCM software:
- Elixir Cloud is fully cloud-native, not lift-and-shift from on-prem software.
- The robust Elixir Cloud API can handle more API calls than competing CCM solutions in the cloud. That lets you move from batch data processing to real-time, on-demand, and event-triggered comms, as well as integrate smoothly with upstream and downstream systems without your CCM becoming a bottleneck.
- Elixir Cloud lets you leave behind bulky, multi-instance dev/test/production environments for CCM — without increasing risk. You can configure workspaces by department, assign permissions by role, and then create, review, approve, and deliver comms inside one secure, central, governed platform.
- Elixir Cloud treats customer data as transitory using features native to our cloud architecture, unlike other CCM platforms that retain customer data for archival and storage (and thereby increase your attack surface).
- Elixir Cloud is built on Linux, which makes it even faster and more efficient than cloud-native CCM software. There are a lot of technical benefits to Linux (lightweight containers, more efficient scaling), but ultimately, it means 50–65% faster CCM jobs and 75% fewer job errors than Windows-based platforms.
We think the “on-prem vs. cloud” question can be a bit of a red herring, as far as CCM goes. Cloud has created so much hype that it’s hard to tell which tools are actually going to help you get value out of the decision to move your CCM to the cloud — instead of just getting you up there with many of the same problems you had with on-prem. Debating the values of cloud software versus on-prem software obscures the drawbacks of cloud-hosted software and encourages a bit of a ‘migrate first, ask questions later’ approach.
In a market filled with vendors who just want to get you on the cloud as soon as possible, the more important question is: “What type of cloud deployment can help you realize the value of moving to cloud?”
If you’d like to answer that question for yourself, request a demo of Elixir Cloud today.
