AI Implementation in Businesses – On-Premise vs. Cloud Solutions

The implementation of Artificial Intelligence (AI) is an increasingly important element of business’ digital transformation journeys. AI offers support for human workforces in many ways, resulting in increased productivity and efficiency. AI solutions can be implemented in both on-premise and Cloud scenarios and here we take a look at the pros and cons of each.


One significant benefit of choosing Cloud solutions when implementing AI in an organization is that it provides more flexibility than on-premise solutions. It allows businesses to try various AI initiatives and test which one works the best for them. Using Cloud-based AI solutions also saves organizations time and resources as they can rely on a specialized company to build the infrastructure of their service.


AI requires data to perform business functions. For example, one branch of AI needed for numerous business operations is Machine Learning. Its primary purpose is to process huge amounts of data at a fast rate. The more data available to the algorithm, the more refined the process will be. By implementing Machine Learning, this vast amount of data will be captured, contextualized and then delivered to the human decision-makers.

Due to the vast amount of data required for refined Machine Learning, on-premise solutions are a good choice for businesses wishing to implement AI applications. All software is installed and run on onsite computers. This means that the business is in full control of all data. No third party can have access to it unless the system is hacked. 

However, securing data of on-premise solutions AI applications requires a team of knowledgable and experienced employees. If a business does not have a team with the required skills, they will not have the resources to protect their data if it is targeted by hackers.


Cloud services’ implementation is low-cost, which is particularly beneficial to smaller businesses. This gives them more flexibility to experiment with their AI applications. They would not need to install any upfront hardware and software or spend money to maintain them, as the hosting vendor provides these services. On-premise solutions require a complete, one-time payment, which means if there is an error with the hardware or software the business will have to spend much more to resolve the issue.

Although the initial implementation of AI applications may be more expensive with on-premise solutions, there is no need for contract terms to be renewed. There is a possibility with Cloud services that an organization’s overall spend may be more over time because of these renewals.

When deciding whether to implement AI with Cloud or on-premise solutions, businesses should consider each of the above points. 

If an organization is at the beginning of their digital transformation journey, Cloud solutions may be a better option. This is primarily due to the benefits of having a specialized company creating an AI infrastructure and the flexibility this offers. Cloud solutions can give businesses the chance to experiment and find the best option for them.

If a more established organization has the resources to implement and monitor their own AI system, on-premise solutions would allow them to have greater control of updates and offer greater security.

K2 has hired tens of thousands of on-premise specialists on a contract or permanent basis. Find out more about our technology services.

Marketing Team