Three real options
Most ERP conversations collapse the deployment question into cloud or not cloud. It is more useful to separate three distinct arrangements, because they have different consequences.
Vendor-hosted cloud
The vendor runs the servers, applies updates and takes the backups. You get the fastest start and the least operational burden. The questions worth asking are where the data physically sits, how you get a full export of it, and what happens to that access if you stop paying.
Your own cloud or private server
The software runs on infrastructure you rent or own, and you decide when it is upgraded. This suits businesses with an internal IT function and a reason to keep the database inside their own boundary. You take on patching and backups, or you pay someone specifically to do them.
On-premise
The server sits in your building. This is still the right answer for operations where the connection is unreliable and work cannot stop when it drops: some manufacturing sites, some warehouses, some remote locations. The trade-off is that disaster recovery becomes entirely your responsibility.
The questions that actually decide it
- Can the operation stop if the internet does? If not, you need local capability, whether that is on-premise or a cloud system with an offline mode for the critical stations.
- Who is accountable for backups? Name the person. If nobody can be named, choose the arrangement where the vendor is contractually responsible.
- What does an exit look like? Ask for a full database export today, before you commit. If it is difficult now, it will be worse in five years.
- Does the licence change with the deployment? With open-source cores it generally does not. With proprietary vendors it often does, and the on-premise option can be priced to discourage you from taking it.
You are allowed to change your mind
The most useful property of a deployment choice is reversibility. If the same codebase runs in all three arrangements and the database is portable, then the decision you make today is not permanent. Start where the operation needs it to start, and keep the door open.