On Premise EDI Vs. Cloud EDI service: Which is Better?

A3Logics 20 Oct 2023


The amount of data that will be kept in the cloud will exceed 100 zettabytes by the year 2025. A zettabyte is equal to a billion terabytes (or a trillion gigabytes), which can help put this into perspective. The entire amount of data that will be stored across the globe will surpass 200 zettabytes in the same year, which indicates that around half of it will be kept on the cloud. In comparison, only 25% of all the data that was being stored by computing in 2015 was done so in this manner. The storing of this data on the servers is done in two ways, one is obviously the cloud and the second is a more traditional storing the data “on premise” method.

The only difference between on-premise and cloud software is where it is stored. Instead of dealing with paper papers, you may send and receive data swiftly and securely over the cloud. This increases the efficiency of your operations, minimizes errors, and guarantees that you satisfy the needs of your business partners.

EDI software companies provides a dependable and simple-to-use solution that streamlines data sharing and increases the efficiency of your organization. Its draw and promise give businesses more freedom, from saving time and money to becoming more flexible and able to grow. However, on-premise software, which is put on a company’s own servers and behind its firewall, was the only option for businesses for a long time and may still meet their needs (think “if it ain’t broke, don’t fix it”). Also, on-premise apps are safe, reliable, and give businesses more control than they usually have with the cloud. IT leaders all agree, though, that they’ll need to use new cloud and SaaS apps along with their on-premise and old systems in order to reach their business goals.


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What is On – premise EDI?


To begin with let’s define what an on-premise EDI system is. On-premise EDI is a software system that is installed and maintained on internal company servers. This means that the corporation is in responsible of the infrastructure, security, and upkeep of the EDI system. Cloud-based EDI, on the other hand, is managed by a separate company. This means that the service provider is responsible for maintaining the EDI system’s infrastructure, security, and upkeep. 


The advantage of an on-premise solution is that you have complete control over it

  • You can handle point-to-point links and many security challenges across all protocols on your own with this level of control.
  • You can make changes fast and without having to wait for and pay for third-party support teams. It is possible if you have complete control over how the data is translated and integrated in-house. However, in order to provide this assistance, you must be able to use EDI.
  • Another advantage of on-premise EDI is that there are no additional expenditures. With cloud-based apps, on the other hand, you’d have to pay for data and provider fees.


The need for other solutions


On-premise EDI gives you full control, but because it is “self-service,” you need a skilled in-house team to make sure there aren’t any costly problems with setting it up or managing it. Many companies find out the hard way when they try to build their own teams that managing EDI takes skills that are becoming harder to find and more in demand. It’s also important to think about not only your own EDI skills but also those of your customers and providers. One way to lower operational and cost risks is to outsource to a cloud-based service. This can also lower the need for everyone to have EDI skills. 


On-premise tools also have the problem that EDI software can make it take longer for trading partners to set up and start using the software. This can cause lost income and slower data processing times. Most of the time, in-house EDI workers can handle a wide range of EDI tasks, such as support, new business, transformation, and integration. Any size of supply chain deployment takes a lot of time, money, and knowledge about a lot of different parts of EDI, like security procedures and standards. It also needs ongoing support and maintenance of relationships that are already in place.  


What is Cloud EDI and how its beneficial?


Based in the cloud EDI refers to a growing group of off-site, web-based tools that allow companies to send, receive, store, and handle electronic trade data. To use a tool that is “in the cloud,” you connect to it through the internet instead of a computer that you have on your own property. Web EDI and EDI through VAN (Value Added Network) are both examples of cloud-based systems that work together.


How is it beneficial?


Simply saying “Cost-effective and able to improve operational speed, end-to-end visibility, and collaboration,” cloud-based tools are a good choice. For the most part, cloud-based EDI eliminates the need to develop or manage as much.


There is just one way for the customer to reach the service. Even better, outbound links might already be built into the VAN service. This makes the “build” process much easier for the VAN provider as well. VAN providers configure and manage all VAN connections, whether linked or direct. As a result, the system is now more easier for all customers to use and maintain.  Furthermore, adding more partners to a VAN system is simple because the EDI provider normally handles adding new resources and resources from other vendors. In essence, you are hiring someone to create and maintain an EDI system for you. 


You can also get cloud-based EDI applications to help you use an EDI system more effectively. WebEDI, for example, contains a number of in-browser features, the most of which are intended to make EDI more user-friendly. For example, you can utilize WebEDI to create web forms that allow anyone, including those with no technical knowledge, to submit data directly into an EDI system. This may be critical for your supply chain partners even if it is not critical for you.  Finally, cloud-based tools, particularly those that run in-browser, such as Web-EDI, make it simple to link B2B systems. This means you can quickly add new trading partners, even if they don’t know much about EDI. This is a big selling point for companies that do business with others that don’t have the right tech or EDI infrastructure or know-how. That’s where the EDI solution providers come in the picture.


Critical Differences Between On premise and Cloud EDI service (table)


Let’s have a detailed comparison between  On premise and Cloud based EDI service on various aspects. 


Element On-premise EDI Cloud EDI Service
Deployment Installed locally on servers Hosted on cloud infrastructure
Infrastructure Requires own hardware Utilizes cloud provider’s infrastructure
Scalability Limited by local resources Easily scalable based on demand
Costs Higher upfront costs for hardware and software Lower upfront costs, pay-as-you-go model
Maintenance Requires in-house IT support. Managed by the cloud service provider
Flexibility Customizable but requires IT expertise Configurable through user-friendly interfaces
Updates/Upgrades Manual updates and upgrades Automatic updates managed by the provider
Accessibility Local access only Anytime, anywhere access with an internet connection
Security In-house security measures Utilizes cloud provider’s security protocols; compliance certifications may vary
Integration May require additional integration efforts Typically designed for easy integration with various systems
Speed of Deployment Longer deployment timelines Quick deployment and implementation
Reliability Dependent on in-house infrastructure Relies on the reliability of the chosen cloud service provider
Disaster Recovery In-house disaster recovery plans needed Cloud provider typically offers built-in disaster recovery capabilities
Monitoring Requires in-house monitoring tools Cloud providers often offer comprehensive monitoring and analytics tools
Global Reach Limited by physical location Global accessibility with data centers in multiple regions


Why are companies migrating to Cloud EDI solutions



The cost of on-premise EDI systems is a major reason why businesses are abandoning them. On-premise EDI requires a significant upfront investment in infrastructure and software, as well as ongoing maintenance. Cloud-based EDI systems, on the other hand, are typically charged on a monthly basis. This allows businesses to just pay for the services they use and to expand or contract as needed. This can be especially helpful for businesses whose customers’ needs change often.




Scalability is another great thing about cloud-based EDI systems. Businesses need to buy more hardware and software if they want to increase their EDI powers because on-premise Complete EDI Solutions have a limited amount of space. It may take a long time and cost a lot to do this. EDI options in the cloud let businesses change how big or small they are with just a few clicks. This makes it simple to adapt to changes in customer needs or to add new business partners.




EDI systems that are based in the cloud also give you more freedom.On-premise EDI systems typically require enterprises to manage their own infrastructure, which can take a long time and be difficult to understand. Companies that use cloud-based Complete EDI Solutions can focus on what they do best while the service handles the infrastructure. This can free up resources and make it easier for enterprises to respond to market developments.


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The process of Migrating to Cloud EDI


The process of EDI Migration is a little bit complex, a lot of organizations, even MNCs struggle in this. A study shows that 5 in every 8 organizations struggle in migrating to EDI.  But with thorough research and after after consulting the top EDI providers and a lot of EDI service providers in USA. We have found out some simple steps for you. They are:


 1: Assessment and Planning:


In this initial phase, it is crucial to conduct a thorough assessment of current business processes, identifying existing data exchange methods and any challenges faced. Clear objectives for the migration should be defined, such as improving efficiency, reducing errors, or meeting specific trading partner requirements. Choose the EDI standards, such as ANSI X12 or EDIFACT, should be made based on industry standards and partner specifications.


 2: Stakeholder Engagement:


Identify key stakeholders and include them in decision-making. To inform stakeholders about the migration process, its benefits, and any changes to existing procedures, a well-structured communication plan is prepared. This step ensures that everyone is on board and understands the importance of the migration.


3: Select EDI Solution:


The selection of an appropriate EDI solution is critical. This involves researching and choosing between in-house EDI systems or cloud-based EDI services based on the organization’s needs. Integration capabilities with existing systems, such as ERP and CRM, should be considered to ensure seamless operations.


4: Trading Partner Onboarding:


Trading partner collaboration is a key aspect of EDI migration. All trading partners are identified, and their specific EDI requirements are documented. Communication is established with trading partners to obtain their EDI specifications and testing procedures. Subsequent testing validates data exchange and resolves any issues.


5: Data Mapping and Translation:


Data mapping involves aligning internal data formats with chosen EDI standards. Translation tools are then used to convert data between internal formats and the selected EDI standard. This ensures a smooth transition of information between the organization and its trading partners.


6: Implementation:


The implementation phase involves configuring the chosen EDI infrastructure, including setting up communication protocols like AS2, SFTP, or VAN. Internal testing is conducted to ensure that the EDI system seamlessly integrates with existing processes within the organization.


7: External Testing:


External testing is a critical step to validate the compatibility and accuracy of data exchange with trading partners. It involves collaboration with trading partners to simulate real-world scenarios and identify any issues that need resolution before full implementation.


8: Training:


Training is imperative for a successful EDI migration. Internal teams need training on the usage of the new EDI system, while external training resources should be provided to trading partners to educate them about changes in the data exchange process.


9: Go-Live:


The go-live phase involves a gradual transition to the new EDI system to minimize disruption. Continuous monitoring ensures the system’s stability during initial days, and support is provided to address any unforeseen issues promptly.


10: Post-Implementation Review:


After implementation, a thorough evaluation of the new EDI system’s performance is conducted. This assessment includes measuring improvements in efficiency, error reduction, and overall cost-effectiveness. Identified areas for improvement are addressed through continuous improvement strategies.

11: Documentation:


Proper documentation of EDI procedures and workflows is crucial for future reference and troubleshooting. This involves documenting the new processes and keeping the documentation up-to-date as the system evolves over time.


How can A3logics’ Cloud EDI services Help You?


A3logics’ is a leading EDI service providers in USA. Their Cloud EDI services can make your business better by helping you easily exchange information with other companies.  Instead of dealing with paper papers, you may send and receive data swiftly and securely over the cloud. This increases the efficiency of your operations, minimizes errors, and guarantees that you satisfy the needs of your business partners. A3logics provides a dependable and simple-to-use solution that streamlines data sharing and increases the efficiency of your organization. They are literally one of the top EDI providers.  A3logics’ EDI services offer significant advantages to streamline your business operations. Here’s how?


  • Efficient Data Exchange:


A3logics’ Cloud EDI services facilitate the seamless exchange of business documents and data electronically. This eliminates the need for manual processes and paper-based documentation, resulting in increased efficiency.


  • Reduced Errors and Enhanced Accuracy:


The automated nature of Cloud EDI significantly reduces the likelihood of errors that can occur with manual data entry. This accuracy is crucial for maintaining the integrity of your business transactions and fostering trust with your partners.


  • Rapid Information Processing:


Cloud EDI enables real-time data exchange, allowing for quicker processing of information. This speed is particularly beneficial for industries where timely communication and transaction processing are critical.


  • Compliance with Partner Requirements:


A3logics’ Cloud EDI services ensure that your business stays compliant with the specific EDI standards and requirements set by your trading partners. This is essential for maintaining smooth relationships and avoiding disruptions in your supply chain.


  • Cost-Effective Solution:


The cloud-based model offered by A3logics eliminates the need for significant upfront investments in hardware and infrastructure. This cost-effective approach allows businesses to access cutting-edge EDI capabilities without a substantial initial financial outlay.


  • Scalability:


A3logics’ Cloud EDI services are designed to scale with your business. Whether you’re a small business looking to grow or a large enterprise with expanding needs, the cloud-based infrastructure allows for flexible scaling, ensuring that the system can adapt to your evolving requirements.


  • Security Measures:


A3logics prioritizes the security of your data. Their Cloud EDI services typically include robust security measures, such as encryption and compliance with industry standards, ensuring that your sensitive business information is protected during transmission and storage.


  • User-Friendly Interface:


A user-friendly interface makes it easy for your team to adopt and use the Cloud EDI services. This reduces the learning curve and allows your staff to quickly leverage the benefits of electronic data interchange without extensive training.


  • Reliability and Uptime:


A3logics’ Cloud EDI services often come with high levels of reliability and uptime. This ensures that the effect of your business processes are not due to system downtime, contributing to the overall stability of your operations.


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To wrapup, now let’s talk about whether it’s time for your company to get rid of its old on-premise EDI system. If your company still has an on-premise EDI system, you might want to think about moving to the cloud. People are moving toward cloud-based EDI options because they want more freedom, the ability to grow, and lower costs. Migrating to Cloud-based EDI solutions can have a lot of benefits, such as lower costs, better security, more freedom, and the ability to grow as needed.

A company must consider many factors these days to determine whether a cloud system is the best option. Many firms, on the other hand, are unable to make the transition to the cloud. As the lack the expertise and skills in it.Instead depend on their tried-and-true legacy and on-premise software and applications to run their businesses. These business must take the help of EDI services provider. Not just and random but have a through analysis and then implement the Best EDI Solutions available for them. 




What is the main difference between On-Premise EDI and Cloud EDI service


For on-premise EDI, EDI software needs to be installed and managed on local computers, which means that the company needs to have its own IT staff. Cloud EDI, on the other hand, is hosted on the infrastructure of a third party provider. This means that businesses can receive EDI services over the internet without having to set up their own servers.


Is one way of deploying cheaper than the other?


According to the answer, Cloud EDI is usually cheaper at first because you don’t have to spend as much on hardware and equipment. On-Premise EDI may have higher costs up front for hardware and software licenses, as well as costs for regular upkeep.


How does each choice handle expanding to meet the needs of a growing business?


Cloud EDI is more scalable because it lets businesses change how they use it and what tools they have based on demand. On-Premise EDI, on the other hand, can only grow as big as the local computers can handle, so businesses need to buy more hardware as they do.


What about the safety of my data?


Both choices can offer strong protection, but they do so in different ways. With On-Premise EDI, companies have full control over their security measures. With Cloud EDI, however, the security measures are set by the cloud service provider. The choice is usually based on the organization’s protection needs and level of knowledge.

Which choice makes deployment and execution go more quickly?


Since cloud EDI doesn’t need to set up local hardware, deployment is usually faster. With the cloud-based approach, businesses can quickly start using EDI services after signing up. On the other hand, On-Premise EDI may take longer to set up because it requires buying and setting up tools locally. Businesses should think about their budget, the need for scalability, the level of control they want, and the level of experience they have in managing the EDI infrastructure when choosing between On-Premise EDI and Cloud EDI service. Each choice has pros and cons, and the organization’s needs and goals will determine which one to choose.