For an On Site installation, the entire software: the programs as well as the data base is installed on a server on your premises. Most of your users shall be connected thru LAN. However users can also work from off site using Internet connectivity.
In a Cloud based installation, there is actually no installation required. The data and programs are already installed on a Cloud server and you can start immediately by log-in thru a Browser. The access would be all thru internet connectivity. Security can be configured to allow.
Cloud based installations are faster and easier to implement. The initial cost and risk is also lower than On site installation.
If for some reasons, you do not have confidence on the Cloud storing your data and wish to have an On site installation, still it may be a good idea to start with a Cloud installation and once things are implemented and any teething issues have been resolved, it can be moved to On Site installation.
