There are three main deployment options for a modern ERP system: on cloud, on-premises servers or on hybrid system. Each has its own advantages and disadvantages.
Cloud ERP Deployment
With cloud ERP, the software is hosted in the cloud and provided over the Internet as a service that you subscribe to. The software provider typically takes care of regular maintenance, updates, and security on your behalf. Today, cloud ERP is the most popular deployment method for many reasons, including lower initial costs, greater scalability, and flexibility. The downside is the requirement for constant internet connectivity for any user.
On-Premises ERP Deployment
This is the traditional software deployment model where you control everything. The ERP software is usually installed in your data center at the location of your choice. The disadvantage is that the installation and maintenance of hardware and software are the responsibility of your staff.
Hybrid ERP System
For companies that need a combination of both to meet their business requirements, there is a hybrid cloud ERP model. Here, some of your ERP applications and data will be in the cloud, while some will be on-premises. Sometimes this is referred to as two-tier ERP. Despite the more stable operation of hybrid systems, this option is more costly.