We assume that, since you are considering the types of PIM, you already know very well what it is and how it works. Also, you probably understand that a PIM system will solve your problems only in case you use it efficiently, in accordance with the objectives, and deploy it correctly. All the employee of your company should be taught to work with PIM system you choose.

So how to choose between two major types of PIM systems: cloud-based and on-premise?

Cloud-based PIM-systems

Everything is moving to the cloud, and Product Information Management is no exception. Over the past ten years, cloud-based software captured the market. When all your data is stored on the vendor side, it provides considerable benefits but also some important concerns.

Cloud-based solutions are known for greater flexibility, scalability, and mobility. Also, the lower entry cost is very appealing. To many companies, especially, middle-sized and small businesses, predictable monthly or annual payments sound much better than investing in infrastructure and staff. You don’t have to buy hardware and software and hire operational figures. You receive all updates automatically and don’t care about your equipment and programs aging. Literally, you just find the right provider and have everything done for you. The deployment takes less time.

Now it is obvious why the cloud is so popular now. Though, it is still considered less secure despite everybody works on the solution to this problem. Also, the ready-made, out-of-the-box solutions never can satisfy all your company needs in full. And to customize such PIM systems, if it is possible at all, you have to turn to your vendor.

Some of popular cloud-based PIM systems are Plytix, EssentialPIM, Salsify, Akeneo Cloud Edition.

Advantages of cloud-based PIM systems

• Low initial investments, pay-as-you-go model. Predictable expenses over time.
• Faster deployment. Cloud-based solutions take considerably less time to deploy and start using.
• Scalability. When your business face increased demands you can easily scale. If the demand is reduced you move back to your original configuration, so you pay for what you use only.
• Easy mobile accessibility. This feature is typical to many cloud-based PIM systems.

Disadvantages of cloud-based PIM systems

• Data security is ensured by the vendor. Storing sensitive data is a risk factor, especially if the servers are shared with other customers. It makes it easier to hack, even if the data is encrypted.
• Less customization. Fast deployment of cloud-based PIM often means it will be an out-of-the-box solution which only partially fits your company. And your in-house IT team most likely will not be able to do anything about it.
• Also, in the long run, the cost-efficiency of cloud-based solutions is debatable. The total cost of ownership may end up at the same rate or even higher than that of an on-premise system in 10 years.

So, the cloud is good but it is surely not a panacea.

On-premise PIM systems

On-premise model is usually chosen for stronger security. You maintain all the data on your own servers, behind your firewall. Be careful, though. It is important to ensure that vendor or your in-house security experts can manage the high level of security. With on-premise PIM, it is true that implementation may take time but it usually means that you fully control it and customize so that it will satisfy all your business needs.

You can prioritize certain departments and arrange employee training as you find necessary. On-premise PIM systems are generally priced under a one-time license fee. So you have to invest more at the beginning but usually, the further operational costs are less (only updates, support, and training).

Open Source PIM systems

Just in case, “open source” doesn’t automatically mean “free”. Open source software means its license allows users access to the source code. They can inspect, modify, and enhance it. With open-source PIM system, your in-house development team can customize it, add new features and integrations. For example, you can connect certain eCommerce platforms, ERPs, which are not on your vendor’s list. You can fix problems (though, it also mean, often you need to fix it and cannot just go to the provider and make them immediately have everything done).

Also, open-source software usually has a big community additionally to standard technical support. In general, the world is moving towards open-source philosophy though not so obviously and fast as to the cloud. The examples of open-source PIM companies are Akeneo, AtroPIM, and PimCore.

Proprietary PIM systems

Proprietary, or “closed-source” companies typically offer an “out-of-the-box” solution. If you ever need some additional features, you will need to wait till your provider develops it, if it is going to. On the other hand, you may find the original functionality sufficient. Speaking of third-party interoperability, most likely, you’ll be able to find a vendor who provides connectors for the platforms, systems, tools you need unless you use something very unusual. One big advantage of proprietary PIM that you don’t need a sophisticated IT-team, you don’t have to choose among options to customize your software. In general, it is easier to use.

Advantages of on-premise PIM systems

• Data security is in your hands. You can do whatever is necessary to protect your sensitive data.
• You can customize the PIM system and have more abilities to shape it to your needs, especially if it is open-source.
• You control the implementation process.

Disadvantages on-premise PIM systems

• Upfront investments are bigger and riskier.
• Customization can increase deployment time and cause inconveniences when the software is updated.
• You are responsible for maintaining and updating the system.

Match the technology to your business needs.

PIM systems are often called “the single source of truth”. But there is no single recipe for the best solution. To decide on what type is better for your company, you should understand your objectives, analyze your company plans for the future and current abilities. Remember that the effectiveness of the PIM system for your organization depends on your decision.