On-premise software, also known as on-prem, is a type of software that is installed and runs on computers on the premises of the person or organization using the software, rather than at a remote facility such as a server farm or cloud. This means that the software is established within the organizations internal system along with the hardware and other infrastructure necessary for the software to function. On-premise software is also referred to as "shrink wrap software".

On-premise software is the traditional form of enterprise and consumer applications. It requires an investment in hardware, software licenses, and in-house IT staff, and the enterprise is responsible for the security and management of the software throughout its lifecycle. This makes on-premise software more expensive than cloud or hosted server models. However, all of these factors also make on-premise software more secure than cloud-hosted software, because the organization has full control of it.

On-premise software is not subject to risks like loss of access during global or local Internet outages, security vulnerabilities that can be introduced by the providers data storage practices, privacy risks, and even the potential business failure of the SaaS provider. The entity using on-premises software is fully responsible for the daily operation and maintenance of the system by itself. This results in more time and costs required for the system operation as well as IT personnel who have specialization in managing the system.

In contrast, cloud-based software is usually served via the internet and can be accessed by users online regardless of the time and their location. Unlike on-premises software, cloud-based software users only need to install an application or a web browser to access its services. Costs needed for access to services are usually lower than on-premises software.

In summary, on-premise software is a type of software that is installed and runs on computers on the premises of the person or organization using the software, rather than at a remote facility such as a server farm or cloud. It requires an investment in hardware, software licenses, and in-house IT staff, and the enterprise is responsible for the security and management of the software throughout its lifecycle. On-premise software is more expensive than cloud or hosted server models, but it is more secure because the organization has full control of it.