On-premise system
In one sentenceA system installed on the business's own computers or server at its premises, which the business runs and backs up itself instead of having it hosted by the provider.
Simply put
In an on-premise system the data stays on the business's server, and it works on the internal network even if the internet goes down. It needs someone to look after the server and the backups.
A cloud system opens from anywhere and the provider looks after the server, and some systems offer both options or a mix of the two.
Example
A factory in an area with an unstable internet connection chooses to install the system on a server inside the factory, connects the warehouse and management computers to it over the internal network, and takes a daily backup outside the building.
Don't confuse it with
Cloud-based systemA cloud system runs on the provider's servers and opens over the internet, while an on-premise system runs on the business's own computers.
in FullScreen ERP
It runs on local LAN networks, wide-area WAN networks and the cloud. Users, branches, and permissions