On-Premise vs. Cloud Password Managers | Finding the best choice for your business

Learn how cloud-based password managers compare with on-premise password management solutions

Key factors when choosing a password manager

Password managers have become an essential tool for businesses. Fast-growing teams manage and depend on many online applications to perform daily business tasks, making password managers an ideal tool to ensure data security and streamline workflows. However, making the right choice between an on-premise and cloud password manager might be the key for long-term efficiency.

In this article, we'll help you narrow down between an on-premise and cloud password manager based on multiple factors, such as scalability, security, reliability, and cost.

  • Main difference between on-premise and cloud password managers

    The primary difference between on-premise and cloud password managers is the way they're deployed and accessed. On-premise solutions are installed on end-user devices by deploying them through internal infrastructure.

    On the other hand a cloud password manager is hosted centrally and can be deployed instantaneously. These solutions usually offer similar feature sets, so let's take a look at some of the key factors differentiating these two options.

  • Identifying the right password manager for your team

  • Ease of use

    If you're looking to get started right away, cloud password managers are the best option. You can easily sign up and get started with your team in a few minutes. You can also evaluate multiple solutions across any device of your choice before you zero in on your target solution. On the other hand, on-premise solutions will have to be deployed individually on end-user machines for them to function as needed.

  • Scalability

    Scalability is a key factor for growing businesses. Cloud password management solutions are usually subscription-based services and help teams instantly onboard or offboard users whenever needed. The same can't be said for on-premise solutions as they require additional servers and other infrastructural changes that will cost time, money, and manual labor to grow alongside your company. If you're a fast-growing business, go for easily scalable cloud password managers.

  • Security

    On-premise password managers ensure your data is managed in-house, reducing the possibility of data exploitation from external threat actors. While any good cloud password manager will offer top-notch security, a few businesses view centrally hosted solutions as a drawback. Such businesses prefer to maintain business data within their in-house infrastructure, either out of personal preference or due to their security policies. If your business does require such restrictions, you might opt for an on-premise password manager.

    However, remember that in order to effectively make an on-premise password manager secure, your teams would have to update patches manually and fixes for critical vulnerabilities as and when they're identified, unlike the cloud solutions in which fixes are handled by the password manager themselves. If you do consider a cloud solution, look for a strong cloud password manager which offers security features such as zero-knowledge structure and AES-256 encryption.

  • Reliability

    Access to login credentials is crucial for any business, making reliability a vital factor when choosing password managers. Cloud password management solutions like Zoho Vault offer a 99.9% uptime rate, as well as a read-only service to allow users to view their passwords during an unlikely downtime.

    However, if even a minor downtime is a showstopper for your business, on-premise solutions may be your best choice. Provided your enterprise can manage the infrastructure requirements, on-premise solutions can offer uninterrupted access to all your passwords, even in the absence of a internet connection.

  • Cost

    The main differentiating factor between on-premise and cloud password management solutions is the upfront cost. A cloud solution helps teams purchase new or terminate existing licenses as they scale. If this flexibility is an important factor for your business, get a cloud password manager. On-premise solutions also include overhead costs of deployment and maintenance, another crucial factor to consider.

  • Bottom line

    FeaturesCloud Password ManagerOn-Premise Password Manager
    Easy onboarding  
    Private hosting  
    Extensive feature set  
    Extensions and apps  
    Safety and reliability  
    Upgrade and maintenance performed by:Service ProviderSelf
    Primarily suitable for:EveryoneEnterprises
    Cost effective  

    Whether you ultimately choose an on-premise or cloud password manager, you've made the right choice of using a password manager for your business. If you're looking for a hassle-free password manager that can be accessed from anywhere in the world using any device, you can't go wrong by opting for a cloud-based password manager. There are several strong, extremely affordable options with flexible plans to suit your business requirements. Zoho Vault is one of the best cloud password managers available, with paid plans starting at $1/user/month.

    However, if you have excellent infrastructure and support teams to manage your custom requirements, on-premise password management solutions might be a good fit, and you can check out Password Manager Pro from ManageEngine—the IT management division of Zoho Corporation.

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