On-premise or “on-prem” for short refers to a usage model for software. In this variant of software use, the software is operated locally on-site by the respective licensee. They use the software on their responsibility on their local servers in their own data center. This is why it is also referred to as an “in-house solution”. The licensee does not incur any expenses for use and maintenance. In return, however, he has sole control over his data and software operation. This is why on-premise solutions are often used by organizations and companies that have to manage sensitive data.
On-premise is thus, in a sense, the counterpart to the on-demand variant, which involves accessing software that is not installed locally but is available in the cloud and is offered and managed by an external operator (also: SaaS = software as a Service). In comparison, on-premise use provides more independence, control, and better software customization options than an on-demand solution. However, it also means more effort and may be associated with higher investment costs.