Cloud Digital Signage vs. On Premise

EPISODE 82 | Sean Matthews, president & CEO of Visix, Inc.

If you’re shopping for a content management system, one of the first things you’ll have to ask yourself is whether you want cloud digital signage software or an on-premise solution. The answer will depend on more factors than you may have considered. How many people need access and where are they located? How much data will you be pulling in and from where? Is it a budget issue?

In this episode, we walk you through the pros and cons of cloud digital signage vs. an on-premise server to give you a head start on evaluating your options.

  • Understand the difference between cloud and on-premise solutions
  • Discover the advantages and disadvantages of each
  • Learn which solution is best for which types of organizations
  • Explore how cloud affects feature sets and desktop apps
  • Hear how digital signage vendors are adapting to a hosted world

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Learn more in our Masterclass Guide: Digital Signage Systems Overview Guide


Transcript

Derek DeWitt: One of the big buzzwords these days is cloud. And no, we’re not talking about the things that carry rain up in the sky, but of course, off-premises software apps and other things to help your organization do whatever it needs to do. Within the context of digital signage and internal or external communications cloud is becoming a major factor. And so, we’re gonna talk about cloud digital signage versus on-premise digital signage today with Sean Matthews, president and CEO of Visix, Inc.

Sean Matthews: Hello, Derek, how are you, sir?

Derek DeWitt: Excellent. Excellent. Thanks for talking to me today.

Sean Matthews: Yes, I’m glad to be here.

Derek DeWitt: Thank you, Sean, for talking to me today, and thank you everybody out there for listening. As always, I’d like to remind you that you can subscribe to this podcast, Digital Signage Done Right.

So, let’s just do kind of a really basic definition here. What’s the difference between cloud digital signage software and on-premise digital signage software? Because it seems counterintuitive, or at least it might for some people. Like, digital signs are clearly on premise. So how can the software be located elsewhere?

Sean Matthews: So, I mean, the fundamental difference between cloud versus on-premise software when you get down to it is just where it resides. You know, on-premise software is installed locally on your business computers or your, you know, university computers and servers. Whereas the cloud software is hosted on somebody else’s server. In our case, it would be our servers, and it’s accessed via a web browser. So, it’s not a locally-installed application. And there’s a lot to consider when you start thinking about cloud versus on-premise software. And obviously that’s what we’re gonna chat about today.

Derek DeWitt: So, let’s talk about cloud first. What are the advantages of cloud digital signage and what are some of the disadvantages?

Sean Matthews: Yeah, there’s a long list of items here, Derek. I mean, and you know, we’ll kind of go through some of these just so that everybody understands some of the advantages and disadvantages going either way. Of course, if it’s in the cloud, you have anywhere, anytime access. So anywhere you have access to a browser, you’ll have access to the digital signage platform. It’s affordable. The costs are predictable because it’s a monthly fee that’s amortized over the year. It’s worry-free IT support because you’re not really having to maintain a server on your own premises. And there are high levels of security, but security is always a question. It’s much easier to get your digital signage system and deployment up and running faster than you might be able to do it yourself with your own servers. Obviously, it’s very scalable because it’s using, you know, cloud computing and the distribution of servers.

And of course, a lot of people don’t think about this, but if you run a lot of servers in your building, you’re consuming energy. In fact, not only the energy of the servers themselves, but the HVAC that’s, that’s required to help maintain the, you know, temperature there in that environment.

Derek DeWitt: Which you’re, you’re paying for that electricity.

Sean Matthews: That’s correct. Yes. And so, that’s one of those things. If you put everything in the cloud, then you’ve actually reduced the cost of that operational overhead, just from an energy consumption perspective. Of course, there are some, you know, disadvantages to the cloud product offering. And there’s some advantages to the on-premise offering.

You know, the total cost of ownership, which is something that most people don’t think about because it seems so inexpensive when you go to the cloud, but the total cost of ownership after approximately three years is actually higher if you go on the cloud versus if you just were to CapEx the entire project up front.

Another advantage, of course, to the on-premise version is that you have complete control. You have control of the hardware, the data, all the platforms and apps that get added to the server. So, I mean you have a lot of configuration advantages when it comes to having stuff, you know, on premise. In terms of accessibility, you know, basically everyone has access to the internet it seems like almost all the time. But, you know, with an on-premise system, you don’t have to rely on the internet at all, right? So, you don’t have any external factors that play into, you know, your digital signage platform. So, there are definitely some advantages to on premise as well.

Derek DeWitt: Right. Okay. That makes sense. So yeah, obviously way more control. You don’t need to have internet if you’re doing on premise. But of course, you do if you’re doing, like, you’re pulling from data sources and things like that. You need some kind of a connection there.

Sean Matthews: Yeah, correct. I mean, if there’s, you know, if you’re running some applications that are already in the cloud, and you’re gonna be pulling data from those applications, then of course, you have to have some internet access there anyway. You know, unfortunately for a lot of companies that would prefer to maintain, you know, the systems themselves, they’re being forced into cloud deployments in cases where they may not want to.

Derek DeWitt: Are there certain kinds of organizations that maybe it makes more sense for one or the other option? Like, I’m thinking of government agencies and things like that. Very often security is paramount for them, which is why sometimes it could take a long time to get a system up and running. I mean, you know, the digital signage system doesn’t need to be air gapped or anything like that. But, you know, I could see like a government agency saying we actually want on premise because that way we have more control over it. But does it make sense, like for a university, is it better for them to use cloud or on premise or does it really matter? Is it a case by case basis?

Sean Matthews: Yeah, it really, I mean, it’s a case by case thing, Derek. I mean if you look at some of our clients. I’ll use two examples. The Federal Reserve Bank, they’re probably not going to ever do anything in the cloud. I can’t even imagine. I would have to believe that there’re probably some infrastructure guidance and or regulations that basically prevent them from accessing things via the cloud. I mean, obviously large portions of all operations are in the cloud these days, but I’m sure that, in our case with them, they’re using, you know, an on-premise solution because they just didn’t want to tee up all of the analysis to confirm whether or not we might meet all those security requirements.

Another example, which is very similar to them, but this is a commercial entity, is the Intercontinental Exchange, which are the owners of the NASDAQ. So, obviously there’s a lot that’s in the cloud when it comes to NASDAQ. I mean, we all see realtime reporting of, you know, stocks and tickers and all those kinds of things. But when it gets down to fundamental use of business-to-business applications, there are a lot of security requirements in place that you just aren’t going to be able to meet with a digital signage solution that’s hosted in the cloud.

But to your point about does it make sense for a university? Well, that’s a great question because there’s more to it than just is it hosted or is it on-premise. Because there’s also, as I mentioned earlier, the total cost of ownership.

And if you think about a lot of universities, it’s not necessarily where the software is located, but how are you gonna pay for it? And so often universities are governed by state budgets. And those budgets often are tied to basically capital expenditures, right, that do not come out of the operational budget. And so, when you look at the costs, often universities can’t project that they’re going to have monies available under the operational expense budget to pay for digital signage in years two, three, four, etc. So, they often find themselves in a situation where they’re gonna have to use their capital expenditure budget monies to go ahead and fully deploy a digital signage solution, which means it’s probably going to be on premise because they’re not going to be able to, again, project that they’ll have budget monies for multiple years in advance to support their digital signage investment.

Derek DeWitt: Right. That makes sense. How about, like if I’m doing say a large deployment versus a small deployment. Again, is there an advantage one over the other?

Sean Matthews: Well, I certainly think there is a slight advantage to those that choose cloud for these large scale deployments, simply because the data centers can be located in various parts of the world, right? So that now, your access to, you know, the various servers is, I wanna say, more localized or more regional. But I think the real advantage is there’s just a lot of scalability when it comes to the cloud and in the overall cloud platform in general. And it would be more difficult to maintain that level of scalability in an on-premise environment. You would just have additional responsibilities as an organization to really maintain that level of scalability.

Derek DeWitt: Have there been any examples in your personal experience of people switching from one to the other? Like they went cloud and then after say three or four years, they said, you know what, let’s go ahead and plunk down for the on premise so we don’t have to keep paying for this. Or the other way around.

Sean Matthews: Yeah. Actually with the advent and the deliverability of our, you know, Signage Suite platform, we see a whole rash of legacy clients of ours who were accustomed to our old platform and often had that old platform in an on-premise environment. We see almost 80% of them now migrating to our cloud solution. And I think that, when I have conversations with those clients, you know, I get a sense that they just believe it’s easier to maintain because it’s not something that they have to worry about.

And there’s often, you know, this challenge of keeping servers up and running and, you know, any sort of power outages that trip up a server, you know, it just, it creates more work for the client in the long run. And this isn’t really a mission-critical platform, so it can easily get lost, you know, sort of in the corner of the server room. And I think that they’re, in general, they, most clients just view this as a support advantage by moving it to the cloud.

Derek DeWitt: Yeah. I mean, I think we know that more and more things, not just digital signage, but a lot of things that we use on a day to day basis, either as individuals or as organizations of all kinds, it’s going more and more towards the cloud. It really, it seems almost like the industry is pushing for eventually everything will be in the cloud. These, I think some of the things you’ve talked about are, are factors in that.

Sean Matthews: Well, I mean, you know, you just mentioned that someday everything is going to be in the cloud, and that’s certainly quite possible. You know, a lot of people talk about, how long has cloud computing been around? And really when you get down to it, software as a service has been around for a really long time. It really started in the 60s. And as you roll forward into modern times, you can just reflect back, you know, just over 20 years ago, when you look at the dot com era and how far, you know, software as a service went in the dot com era. I mean, prior to that, there wasn’t really online commercial access to shopping and retail platforms. And there wasn’t even really, really accepted and/or effective ways to spend money online and securely purchase, you know, goods and services, that sort of thing.

So, but when you, when you really, you know, move forward past the dot com era, and then you start getting into the 2000s and you see companies like Salesforce come online. I mean, that’s when you really start to see business-to-business, you know, software as a service really start to take off.

It’s easy to confuse cloud with the advantage of, let’s say, desktop applications. So, you know, when you think about cloud, what we’re really talking about is accessing an application via a browser, right? And that’s really what you’re doing, but not every product truly lends itself to being a software as a service. So, when I mention things like Salesforce, you know, really, it’s a large database and you’re accessing data, right? And that’s pretty easy to move via a browser or over the web. But when you start looking at applications like let’s say Photoshop or a higher-end digital signage design application for creating layouts, those products really aren’t geared towards operation in a browser.

And so, you know, when you even think about products like Adobe – and they talk about their Creative Cloud – well, the application itself is running on your desktop. Now you might be accessing a lot of things, fonts and images and that kind of stuff, but the application itself, it resides on your, on your desktop machine. And, you know, that’s really the case with our product today.

Our design product is a desktop application and it runs on your desktop and, you know, it has enormous functionality. And the results of your designs get synchronized to the CMS, which is in the cloud. And then that’s how ultimately it gets delivered out to the media players.

But I only bring this up because I’m not convinced to this day that we’re 10 years away from, quote unquote, everything being in the cloud. Because I was just reading the other day, an article about AutoCAD, which has always been a very powerful and processing-intensive application. So, their web version of AutoCAD – and they basically coin it as such – is a light version of auto.

Derek DeWitt: Yeah, yeah, sure. ‘Cause that’s, that’s an incredibly robust… People joke about, you know, how complicated and resource hungry Photoshop is. AutoCAD is a very robust software platform.

Sean Matthews: It would be difficult from a programmatic perspective to put all of that functionality in a browser. And in fact, the browsers which, you know, become basically their own operating system still may not be capable of running all of those features in a browser.

Derek DeWitt: Maybe some companies like Photoshop, for example, I’m sure that they’ve done studies. I haven’t bothered to look, but I’m sure there are studies that they’ve conducted. Look, we have X number of options in the Photoshop app or software, and yet 90% of the people use these 20, you know. Which kind of lends itself to, well then why not do a light version for those people. And the people who do need all of those features, well, they’re gonna find a different solution, which will probably be an on-premise or some kind of a hybrid.

Sean Matthews: You know, you’re spot on there. You know, some people ask about, you know, the functionality of our design tools in the browser. And they’re pretty limited when compared to the desktop application. So, you know, we fit more of that, that hybrid role, where we are using desktop applications with synchronization to the CMS, again, for the purpose of delivering content to your displays. But it is not a true software as a service where it’s fully accessible just as a browser.

Derek DeWitt: So now, Visix uses Azure for their cloud services, yes?

Sean Matthews: We do. We do. In fact, we made that decision about eight months ago and we decided that we had been using various other providers with data centers in the United States, and we were having more and more clients who are multinational corporations and, you know, we needed to be able to scale up our multi-tenant platform at a very high level. And we just didn’t think it made sense with some of the other providers we looked at. You know, we maybe could save some money, but when it came to scalability, security, support, we thought that the Microsoft Azure platform was a good fit for us and our clients. And thus far we’ve been, we’ve been quite happy with it.

Derek DeWitt: Why do you think it lends itself to your context specifically?

Sean Matthews: Historically, our multi-tenant offering was not very scalable and the computing power that we needed now – that we can add literally hundreds of tenants to a single server – we just felt like that we needed a more robust platform. And we think we found that in the Azure platform.

Derek DeWitt: Now, when you get a platform like this that is so robust and has so many possibilities associated with it, I would imagine that one of the concerns would also be security. ‘Cause like we said with government offices, but everybody says this. Corporate offices want it, universities want it, even hospitals want it. Security’s an important issue. How is cloud dealing with this whole data security conversation? ‘Cause you know, nowadays stuff gets a little bit weird on the international stage and suddenly I find all of my software starts updating every 48 hours with yet another update. How does that all fit in with cloud?

Sean Matthews: Well, I mean the security question, definitely it comes up in the cloud conversation. And the reality is in an on-premise environment, if you have the very best security experts that you can possibly employ, you know, they can create security parameters and a security infrastructure that meet all of your expectations, right? But what you might be paying for that security may actually be greater than its, its true benefit.

Now, if you take somebody like Microsoft, you know, they’re, you know, quite the security experts themselves. So, when compared to what we might have had at a, at a more regional provider, you know, clearly, we believe that there’s an advantage going the Microsoft route. Now you could argue that a brand like Microsoft could easily be a target for, you know, someone that might want to go cause harm and try to bring down a particular network.

But the reality is is that, when you talk to a lot of security experts, they all agree that if someone is out there fishing for weaknesses, they’re not gonna spend a lot of time with the likes of, you know, Amazon or, you know, Google or even Microsoft. Those are high profile targets, but the amount of energy that you might spend trying to, you know, claim a victory in some sort of security hack is quite high. By comparison, there are other places that you could go to wreak havoc, if that was your intention. And it’s been our observation thus far that our clients are, definitely have an advantage by being on the Azure platform when compared to other options that we had in the past.

Derek DeWitt: Now having a cloud offering, does that present difficulties when you’re developing new stages to the software, new apps, new widgets and so on? Or does it make it easier, or does it not really factor into development?

Sean Matthews: You know, I don’t believe that it really factors into the developmental process at all or the development process at all. I will say this though, if we add features that want to be accessible through the browser – so if we start to expand our design tools, place more of those feature sets in browser accessible, you know, user interface – that does pose, you know, certainly some programmatic issues. Because you know, there’s not just one browser in the world. There are certainly more than one, even though it seems almost like ubiquitous that there is just one. But you know, there are different versions to that browser as well. Not everyone maintains updates just because they choose not to.

Derek DeWitt: Which they should. You should be updating the stuff you use every day. Just gonna say it again, folks.

Sean Matthews: Correct. But you know, we obviously run into problems like that all the time where people aren’t current. And particularly in business environments, which is often very different than what you and I do as consumers. There’s often, you know, a lot of controls in business environments that don’t even allow employees to update, you know, browsers and other things. There’s, they don’t, they don’t have the administrative rights to even download those updates. So in short, I don’t believe that, you know, supporting product in the cloud really adds any more software development time or headache to the process.

Derek DeWitt: One of the reasons I ask is, you know, way back when, when you guys first started in the digital signage space, there really wasn’t much in the way of competition. And now there are, there are a lot of little companies showing up. More all the time offering some kind of cloud-only digital signage solution to people. Is that because the cloud technology has made that easy to do? Or is it just that it’s, it’s quick and easy to get a company up doing this stuff, or what? What do you think is the cause behind all that? ‘Cause you know this. I’m sure you’re completely aware of it. You have now lots of little guys out there.

Sean Matthews: You know, Derek, there are a lot of players in the digital signage space. When we first got started in ’99, there really weren’t any competitors in this space. And you know, now, as you noted, they’re, they’re everywhere. But there’s also been some consolidation in this space and there’s been a lot of equity investment that has rolled up a lot of operations. And of course, the pandemic even accelerated some of that. People found themselves, I think in some difficult financial positions, and they chose to go the equity route or the acquisition route in order to, you know, help them survive really quite frankly.

But the ability to go out and programmatically build a user interface that allows people to simply upload content and schedule when and where it’s gonna play. I mean, there’s not a huge barrier to entry and it’s not necessarily a cloud thing or not. It’s just that when you can develop software and deliver it via the cloud, you can deliver it to a lot of people at a lot lower cost. So again, the financial barrier to entry, to start from scratch and build a cloud-only software as a service for digital signage is quite low. And so that’s what has, I think, spurred a lot of people to get into this space.

And of course, you know, for us, as a long term player in this environment, you know, we realize the value of the richness and the depth of the feature set that we have and the broader customer service and support infrastructure that we have. You know, that really quite frankly, is one of the real differences between us and a lot of the sort of upstart players. And I’m not minimizing those guys. I’m just saying that there’s clearly some differences structurally when it comes to business-to-business support in enterprise environments.

Derek DeWitt: So, what do you think, what do you think the future holds first off? Do you think that we’re gonna see yet more digital signage or digital-signage-like companies proliferate? Or are we gonna see a point sometime in the future where look, the tech is the tech, and some companies are just gonna fall by the wayside and we’re gonna end up like we have in a lot of other fields with just a handful of players?

Sean Matthews: To be quite frank, I don’t envision a day in the future where there’s only a handful of players. You know, despite the arrival of equity investment in this market space and some consolidation that has occurred, I view this space as being more like what you would find in the ERP or online accounting world. You know, there’s lots and lots of players in that space. And I believe that the same will hold true here.

Because, you know, as we look at the movement to standardized hardware, like BrightSign media players and other things like that, you’re going to see, I believe, a lot more people building unique user interfaces for very specific types of offerings. One might for example, be simply menu boards for, you know, small restaurants and small restaurant chains. And what you might also see is, you know, environments where people are building user interfaces very specifically for gas stations or independently owned gas stations.

Derek DeWitt: ‘Cause someone that doesn’t need, you know, all this. Like we’re never gonna data map. We’re never gonna, you know, pull in all this stuff from spreadsheets and so on. We, we need two screens up and we have a pretty limited offering of what we’re gonna be showing on there.

Sean Matthews: Correct, yes. And in fact, you know, that’s almost like PowerPoint editing and then playing it on, you know, large form-factor displays. And so, you know, there’s a whole market out there for those kinds of things. And when you think about, you know, the segmentation of markets for us – everything from higher education to corporate campus to manufacturing and even healthcare – all of those markets wants something a little bit different. And that doesn’t even include what you might find in hospitality or quick-serve restaurants or, you know, gas stations or other retail applications. So, there’s a, there’s a lot of market segmentation and there’s no real universal answer that can meet all of those market needs.

Derek DeWitt: So, do you think we’re gonna see more cloud-based digital signage options out there for the consumers? For organizations? Or is it gonna be like it is today, which is some in cloud, some not?

Sean Matthews: I do believe, Derek, you know, we talk to people that are interested in our business from an investment perspective. You know, what they’re all focused on is what does the cloud solution look like? How do you minimize client churn? You know, what do your renewal rates look like? What does the compounding number look like, you know, from renewing those subscriptions? And so, I honestly believe that there will be less and less desktop development in the digital signage market space. Just because as the technology becomes more ubiquitous and what people are expecting to see on screen may be very similar to what you see in website design with templated products like WordPress and, you know, other things like that.

You know, my belief is that in the end, you’ll see more cloud. You’ll see less and less desktop applications. And consumers will have a lot of choices in the B2B market space about what types of platforms they prefer and what it is they intend for them to do as it relates to what’s on screen. It’s just going its own way. You know what I’m saying? Like, it’s not like there’s somebody out there just driving this, you know, it’s all cloud or nothing. It’s just happening in general business environments where the expectation is for these non-mission-critical platforms that they just be in the cloud because it’s easier to maintain.

Derek DeWitt: And like you said, that, that lower initial cost, at least for the first few years is, has got to be tempting for some organizations, especially if they’ve been tasked with, you know, what might seem like an impossible task. Hey, we wanna, we want to get digital signage up and we need it up in three months.

Sean Matthews: Yeah man. I mean that’s, that’s certain. You know that low cost to entry is definitely appealing. What we’ve noticed is, as of recent, we have some competition that is renewing their subscriptions and they’re renewing them at minimum terms. Meaning like you have to renew for three years. And see, that’s kind of crazy because the beauty of being in the cloud is if you don’t like it, you can walk away from it. Right? Like as a business, if we’re disappointed in the feature set, the services, etc., we just walk away and go to another one. But if you start, you know, enforcing these multi-year contracts up front, this is, you know, an interesting, you know, new trend that we’re seeing from one competitor in particular. And I’m a little surprised by that direction, you know?

A lot of industries, you know, go through this evolution and, you know, some players are completely lost in the whole evolution of the, of the industry. And then others succeed and thrive, you know, in these new environments. And often, you know, we were talking about these like lots of little competitors, that there are some barriers to entry, from a sustainability and relevance perspective, man.

I mean, you know, to go out and buy Google AdWords for digital signage in our market space, a single click can be as much as $29. And some people may say, oh, that’s, that seems kind of low. Well, no, to me 40 cents is low, but not $29. Right? For everyone that clicks on this ad, right? And you know, you better have a lot of money if you’re gonna try to be competitive in that, that regard. Right? You know, just because you say stuff is free, doesn’t mean people will buy it.

Derek DeWitt: Digital signage is a comprehensive tool for both internal communications and communications with the public, for any size organization and for any kind of organization. And more and more people are starting to find advantages to going to the cloud. And I think it’s safe to say that is here to stay in some way, shape or form. It’s been an interesting conversation. I’ve kind of thought about this, but not that deeply. Not as deeply as clearly you have, ’cause you, you had some things to say that I had not really considered.

Sean Matthews: Well, I, I enjoyed the conversation. I appreciate you having me on. And, you know, hopefully someone maybe picked up a little nugget here and there about some advantages to the cloud and/or on-premise versions of digital signage platforms. And, you know, I look forward to having another conversation with you in the future.

Derek DeWitt: All right. My guest has been Sean Matthews, president and CEO of Visix digital signage in Atlanta, Georgia. I’d like to thank Sean for talking to me today and everybody out there for listening.

Sean Matthews: Great. Thank you, Derek.