What is a cloud chatbot?

A cloud chatbot is a chatbot that is hosted and operated in the cloud. A chatbot is a computer-controlled software application that can conduct human-like conversations with users via chat interfaces. The cloud refers to the provision of computing resources, such as servers and storage, via the internet. A cloud chatbot can be accessible via various channels such as websites, messaging platforms, mobile apps or voice assistants. It uses artificial intelligence (AI) and natural language processing (NLP) to understand the user’s input and respond appropriately. The AI models and processing take place in the cloud, which enables the chatbot to be scalable and to serve a large number of users efficiently. Cloud chatbots offer a wide range of applications, including customer service, technical support, sales support, information provision and much more. By continuously improving AI technologies, cloud chatbots offer an ever better user experience and can handle complex requests and interactions.

What is an on-premise chatbot?

Unlike cloud chatbots, on-premise chatbots are hosted within an organization’s premises, usually in the company’s data centers. They offer better control, customization options and potential benefits in terms of security and data protection.

What are the advantages of on-premise chatbots?

1. Improved security: With on-premise chatbots, companies can ensure that their sensitive information remains protected. The data is stored on their own servers and is not susceptible to hacking or data leaks that can occur with cloud-based solutions. Of course, a company’s own data centers can also be hacked, but companies themselves are responsible for protecting themselves from outsiders.
2. Adaptability: Companies can adapt their on-premise chatbots to their specific needs and requirements. You can add custom features, integrate with other systems and make changes to the chatbot as your needs change. Cloud chatbots only offer these advantages to a limited extent.
3. Cost efficiency: On-premise chatbots can be a more cost-effective solution for companies, especially for larger companies. There are no ongoing fees for the cloud and they can be maintained in-house, which reduces outsourcing costs. However, these advantages are generally only noticeable in large companies with a high chat volume.
4. Improved performance: On-premise chatbots can be optimized for maximum performance. Companies can choose the hardware and infrastructure that best suits their needs and monitor the chatbot’s performance in real time. You are not dependent on an external cloud provider

Which companies are suitable for on-premise chatbots?

On-premise chatbots are mostly suitable for very large companies with their own data centers or servers.

If companies can already estimate that very high chat volumes will be achieved when purchasing chatbots, on-premise chatbots can offer further cost benefits.

As on-premise chatbots generally require further development or regular updates, this type of chatbot is suitable for companies that have sufficient internal resources.

Finally, of course, the general organizational conditions also play a role in the decision for on-premise chatbots. If companies have previously purchased all technologies on-premise, an on-premise chatbot also makes sense.

How are on-premise chatbots implemented?

In principle, every on-premise chatbot project starts with the creation of a concept including Requirements for the chatbot. You can find out more about the chatbot concept on my Chatbot Canvas page. This is followed by the selection of a suitable on-premise provider. In contrast to cloud chatbots, there are only a few providers that offer on-premise chatbots or voicebots.

The solution from Münster-based Dialogbits is one of the few that also offer chatbots on-premise. They do this primarily for the entire Savings Banks Association in Germany.

In Switzerland, Enterprise Bot in particular stands out as a provider of on-premise (and cloud) chatbots. Her references include Swica Versicherung and SBB.

What are the advantages of cloud chatbots?

1. Scalability: Cloud chatbots are highly scalable. They can be easily adapted to your company’s requirements, regardless of the number of users or chat volume. If required, resources such as server capacity and computing power can be added or reduced quickly and easily.
2. Cost efficiency: Cloud chatbots offer a cost-effective solution for smaller companies compared to on-premise chatbots. They do not require an expensive hardware or server infrastructure that needs to be maintained and updated. Instead, companies generally only pay for the resources they actually use and can scale up as required. This advantage is particularly important when companies want to get started with chatbots and cannot yet estimate how much the bots will actually be used.
3. Updates and maintenance: Cloud chatbots are maintained and updated by cloud providers, so companies don’t have to worry about infrastructure maintenance. Updates and security patches are implemented automatically to keep the performance and security of the chatbot up to date. This factor is a significant added value, especially for companies with fewer IT resources.
4. Accessibility and availability: Cloud chatbots can be accessed from different platforms and devices. They offer high availability and are accessible around the clock. Users can access the chatbot from anywhere and at any time, resulting in a better customer experience.
5. Integration and data management: Cloud chatbots enable seamless integration with other cloud-based systems and services. They can be easily connected to CRM platforms, databases and analytics tools to efficiently manage data and gain comprehensive insights.

Which companies are suitable for cloud chatbots?

Cloud chatbots are particularly suitable for smaller companies or companies that want to start slowly with chat technology without knowing how high the volume will really be later on.

If companies are already using other technologies via the cloud, it makes sense to also use chatbots via the cloud. Companies then do not have to take care of maintenance, hosting and updates themselves, but can outsource these activities to the cloud provider.

How are cloud chatbots implemented?

Like every chatbot project, the Cloud Chatbot project starts with a concept. All requirements for the chatbot are defined during the concept phase. Suitable providers who meet the desired requirements are then sought. The requirement for hosting in the cloud is a challenge for very few chatbot providers. Almost all providers offer chatbots in the cloud.

You can find out more about the chatbot concept on my Chatbot Canvas page.

And you can find out more about the technology selection in this article.

Conclusion: Which is better cloud chatbots or on-premise chatbots?

There is no definitive answer as to whether cloud on on-premise chatbots are better. Basically, it always depends on the company and the requirements for the chatbot.

In general, however, it can be observed that more and more companies are opting for cloud chatbots. This also includes more and more companies with sensitive data, such as banks and insurance companies.

If you have any further questions about cloud vs. on-premise, feel free to get in touch with me. Send me a WhatsApp message or an email and we can have a chat.

A quiz at the end

To test whether you have understood everything, you can take this Eggheads quiz bot. Have fun with it.