What is On-Premise Password Management?

On-premise password management is a password security software system that exists to protect against internal and external threats to a company’s critical data. These include credentials, master passwords, tokens, and other important information relating to passwords and other keys for access. It acts as a centralized security control that is operated only within the physical location of the company, or business that it serves to protect.

Both the software and hardware of that password manager are restricted to its particular physical address where it is located. This is in most cases, the company building or the premises. By the way, the buildings are also heavily guarded.

Just like any other security software, an on-premise password manager is made up of traditional security architecture that has physical divisions with boundaries. Security walls make the necessary separation from one zone to another, both in software and hardware form. This has been and is still the set up for most big companies and businesses today. This is also especially true of highly regulated businesses such as government agencies and banking industries.

As in the case of enterprise-level password managers, immediate access to data is a little bit more complex and time-intensive. It involves adjustments that need to be done when employees get promoted, transferred, or even removed. It also applies to projects that are started where passwords have to be created, changed, turned around, or deleted. All these things are done simultaneously in real-time. Thanks to enterprise-level password managers these now can all be done automatically, locally.

What are the Benefits of Password Managers Being On-Premise?

Security and Control

Proximity plays a big part in the kind of sense of security that only on-premise managers can provide. It means that passwords and other critical data are kept, managed, and are only available internally which means only inside of the business network. This gives a sense of safety in a way that data doesn’t have to leave the premises and cross over to another location where data can be intercepted in transit.

On-prem password managers also give human department managers complete control over sensitive data and its movement. The system is focused on reducing risk when and wherever possible. Separate physical bordered zones can also serve as overlapping security layers in case of a breach. Separate systems can activate security contingencies to stem or stop further compromise. In other words, when the system is attacked and one goes down, other parts can secure themselves and prevent further intrusion.

On-Premise Vs. Cloud-Based Password Managers

Although there have been definite advances in internet technology that could reassure any business owner. The safety of their passwords on a cloud-based system still causes a little bit of concern with clients. Albeit this is enough for big businesses to stick to on-prem managers.

Cloud-based password managers which are less expensive and come with multiple security layers, do still have to contend with risks like possible data leak and eavesdropping. Once data leaves your physical location it still is vulnerable one way or the other. And naturally, if the data is super sensitive you simply cannot share it with a third-party provider in a cloud-based environment.

However, with the kind of security that is provided by some SaaS type of password managers nowadays, you can consider going for the cloud instead. After that, maybe you can make assessments as you go along. Common business sense does sometimes outweigh the smaller risk depending on the kind of business that you have.

At the least, if it doesn’t involve national security, by all means, you can choose affordability.

What Are Some of the Disadvantages of the On-Premise System?

For most small business owners, it is usually the cost that sets them back in making that investment. The reason why big businesses and high regulation companies still go for on-prem is because of security. Otherwise, they too would want alternatives.

On-prem systems such as a password manager will require an initial purchase of software and hardware server, licensing, integration processes, and IT personnel to maintain and troubleshoot potential problems. Recurring expenses may include updating, security patches, and system audits. These expenditures don’t even cover the potential cost if the system doesn’t work.

The on-premise system won’t be as mobile and agile as most businesses that are on the Cloud. Moving or changing locations for on-prem won’t be as quick and easy as deactivating your account from a SaaS platform. It will involve physical dismantling and moving of hardware, as well as setting it up in the new location. It will be considered a new install which is another expense.


Whether you are a small or a big business the security of access to your data is of the same level of importance. So, whenever you decide on how you will protect your passwords, it will depend on what kind of data you are protecting. And when you get to figure it out, weigh it against the risk of potential breach and chances of recovery.

Yes, you can  make a profit and be safe at the same time.

PRIYA JAMES is a Cyber Security Enthusiast, Certified Ethical Hacker, Security Blogger, Technical Editor, Author at GBHackers On Cyber Security

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