Multi-Level Marketing (MLM) businesses heavily rely on MLM software to manage their complex business operations, such as inventory, sales tracking, network hierarchies, commission distribution, reporting, and more. This software provides all the ideal and advanced tools as well as technologies that automate complicated MLM workflows, significantly reducing the manual workload. Therefore, having the right MLM software can greatly impact the efficiency and growth of a Multi-Level Marketing enterprise.
If you are just starting in the MLM industry or looking to expand your operations, you may find yourself uncertain about whether to choose cloud-based or on-premise MLM software. Although there is no single right answer to your dilemma, we can provide you with a comprehensive comparison of cloud-based and on-premise MLM software to help you make the best decision for your MLM business. Continue reading to discover your answer!
Understanding MLM Software
A robust MLM software is a fundamental technological infrastructure of any modern multi-level marketing company. This software is classified into the following two types based on the deployment method.
Cloud-Based MLM Software
Cloud-based MLM software, like other cloud-based solutions, is hosted on external servers provided by vendors and can be accessed via an internet connection. It allows companies to manage and grow their multilevel marketing businesses through a web browser or mobile application. This software follows the Software-as-a-Service (SaaS) model, which means the vendor is responsible for the system maintenance and security.
Key Features:
- Accessible through any device type
- Fitted with multiple compliance tools
- Enable automated commission calculation
- Effortless business product and inventory management
- Delivers a complete and real-time genealogy tree
- Support payment gateway and E-wallet integration
- Subscription-based pricing
- Automated upgrades and cloud backups
On-Premise MLM Software
On-Premise MLM Software operates through the MLM enterprise’s personal server and infrastructure. Thus, the multilevel marketing businesses hold the authority to customize the software architecture along with securing the MLM data. Additionally, they are solely in charge of maintaining the IT system and hardware. As a result, this strategy delivers greater accountability along with control.
An MLM company can, however, either hire an internal team or contract with an MLM software development company to build, implement, and maintain its software.
Main Features:
- Control over system customization
- Complete data ownership
- Require internal hosting
- Needs upkeep and updates
- Require advanced security configurations
- Possible integration into current enterprise systems
- One-time or perpetual license fee
- Role-based user management and permissions
- Reporting tools for performance tracking and compliance monitoring
Comparison of Cloud and On-Premise Multilevel Marketing Software
Check out the major differences between these MLM solutions to know which one can be right for your business:
Implementation and Deployment Time
Cloud-based MLM systems are typically deployed within one day of signing up for the vendor’s SAAS service. The service providers would set up the server and handle all backend configuration tasks. Thus, you don’t have to worry about either the system installation or configuration.
An on-premises Software is deployed in-house and within the IT infrastructure of the MLM enterprise. Thus, enterprises need to manage the whole process of setting up the server and installing the software into existing business systems, as well as data migration. It can take a few months or more.
Which is better: Cloud-based software is ideal for businesses with limited time and wishing to start operations as soon as possible.
Overall Cost
Cost is a crucial factor to consider when starting or scaling any business venture, and the same is true for a multilevel marketing business.
Cloud-based software can be accessed through a subscription payment model. You may need to pay a fee on a monthly, quarterly, or annual basis, depending on the chosen plan and vendor. Furthermore, update and maintenance costs are included in the subscription fee.
On-premises software development necessitates numerous cost considerations, ranging from server hardware to power consumption, setup space, licensing, and, particularly, an in-house team. In addition, you must cover the costs of maintenance and upgrades.
Which is better: Although a cloud-based system may appear to be cost-effective at first, subscription fees can quickly add up. On-premise MLM infrastructure is expensive, but it has been shown to provide a higher ROI over time.
System Scalability and Flexibility
As the cloud-based MLM solution providers serve businesses of different scales, they provide different plans with various features. As a result of the flexible infrastructure, you can easily switch the plan to add more features and scale up the business as needed.
In contrast, on-premise software has limited scalability. As a result, as the business grows, infrastructure must be reconfigured, which requires additional development time and cost.
Which is better: Cloud-based MLM platforms easily provide a large level of infrastructure flexibility, and that too with minimal disruption. However, the scale of scalability access is still limited. On-premise software can be scaled to any level by investing more resources and time, which is relatively valid for large-scale MLM businesses.
Accessibility
Accessibility is the primary USP of cloud-based multilevel marketing platforms. As long as you have a reliable internet connection, you can use them on any device and in any location. Therefore, your employees can manage the MLM operation remotely as well, negating the need to have an office setup.
However, most on-premise MLM systems can be accessed in the operational center and from the company’s internal network. Remote access can only be achieved by investing in complex and costly terminal servers or VPNs.
Which is better: Cloud-based MLM platforms provide better flexibility over the On-premise systems.
Customization and Control
MLM business operations are too complex and vary depending on the compensation plan, workflow, product structure, and many other factors. However, cloud-based MLM systems don’t provide such a level of customization due to built-in constraints. While some cloud-based software offers several customization options, they often come at a high cost.
On-premise software provides complete customization control, as the system is tailored as per the business goals and workflow in the first place. From commission distribution to business regulations and third-party integrations, the software can be customized to meet the needs of specific MLM businesses.
Which is better: Businesses frequently prefer on-premise software for MLM operations due to the unlimited level of customization control. Cloud-based MLM solutions are incapable of meeting the needs and goals of businesses in diverse niches.
Data Security and Privacy Assurance
Security has been a major concern in the multilevel marketing industry because of the handling of internal critical business data, sensitive client information, and financial transactions.
Cloud-based software vendors use standard security measures such as end-to-end encryption and intrusion detection systems, as well as ensuring compliance with international data privacy laws such as GDPR, HIPAA, ISO standards, etc. However, they are still unable to secure the data and have suffered losses in intellectual property, finances, and other areas.
On-premise software provides full control over business data and even gives the authority to keep it secure. You can customize how the MLM software data is stored, managed, and even backed up. Furthermore, it is possible to comply with any type of strict regulations while maintaining the highest security standards.
Which is better: On-premise MLM software is the best option if you want to control security and use the most advanced security protocols to protect network data.
Comparison Table: Cloud-Based vs. On-Premise MLM Software
Deployment Method Operates via external cloud servers Installed on company-owned servers
| Feature | Cloud-Based MLM Software | On-Premise MLM Software |
|---|---|---|
| Remote Accessibility | Accessible through any device with an internet connection | Primarily accessed through local networks (VPN) |
| Installation Time | Quick setup (A day or two) | Requires extensive time |
| Pricing Model | Ongoing subscription fees (monthly or annual) | One-time license fee |
| Customization Options | Limited Customization | Fully customizable |
| Software Integration | Need the most modern systems and cloud apps | Support traditional enterprise software and systems |
| Data Control | Data is stored and managed by the vendor | Deliver complete data control |
| System Maintenance | Updated and managed by the vendor | Requires in-house updates and maintenance |
| Growth Flexibility | Easily scalable by switching plans | Scaling needs infrastructure and technical resources |
| Security Management | Standard security measures | Custom security frameworks |
Which One Should You Choose?
Not just ideal MLM software, but ideal MLM software for your MLM businesses depends on several key factors:
Choose cloud-based software if you:
- Are just starting out and fall under Small to medium businesses (SMBs).
- Have limited IT resources
- Have a low upfront budget
- Wish to get started quickly
- Operate a remote business
- Are located in areas with a strong internet connection
Choose On-Premise MLM Software if you:
- Are a large Multi-Level Marketing (MLM) enterprise
- Need more control over system customization
- Have a higher investment budget
- Require an extra-advanced secure system architecture
- Maintain a sizable internal IT staff
- Have sufficient time for implementation
Wrapping Up
Both cloud-based and on-premise MLM systems are excellent options depending on your business model, future goals, and available resources. If you wish to have the best of both worlds and robust MLM software that is also within your budget, Webcom Systems can assist you with that. With over 20 years of experience, we provide customized MLM software tailored to meet the specific needs of various multi-level marketing businesses.
Are you ready to launch your Multi-Level Marketing business with a powerful, custom MLM software solution? Contact us today!
Recommended Read: Smart Contract Based MLM Software Development
