Cloud-based point of sale systems have become synonymous with all things new and sexy; while traditional POS systems — a.k.a. legacy POS — is often perceived as being old and unattractive. While this might be the case for some traditional POS systems, others are aging more like a fine wine or scotch with a strong foundation that has allowed them to mature alongside technology (more on that later).
Point of Sale (POS) technology has made significant strides in the last decade, and you’ve probably heard a lot about cloud-based POS systems. However, there still seems to be confusion as to what cloud POS does or does not mean.
The goal of this article is to break down the difference between cloud POS vs. traditional POS systems so you can walk away with a clearer picture of what is the better option for your business.
The Real Difference Between Cloud POS and Traditional POS
It all comes down to architecture. With legacy POS systems, all of the data is stored on a local server at the business. That means the business owner or manager must be present at the physical location to view reports, make changes to the menu, or any other task involving the point of sale software.
By today’s standards, a POS system that is only available on-premise doesn’t cut the mustard. However, 20+ years ago when point of sale systems started becoming popular with large enterprises that could afford them, there wasn’t much choice. By default, all traditional POS systems have factors that limit agility simply because of age:
Database selections were limited. You had Visual Basic, C++, or Delphi to develop in. POS software companies had to pick a database structure and wrap their entire product around it.
The software company’s developers had to pick a programming language and standardize it across the entire application.
An Operating System (OS) had to be chosen to execute the tasks and commands of the software. At the time, Windows was the only OS with meaningful market share and the reason why many legacy systems were built using Windows.
However, with age brings experience. Experience building decades worth of POS software features that can accommodate any size business in a given industry. The evolution has been gradual and meticulous – building on the needs of merchants like you. These traditional POS companies have also spent years developing extensive support resources to better serve their customers.
The right thing is combine the everyday experience of old age with the vigor of youth. – George Bernard Shaw
Cloud POS solutions have had a very different evolution. Most started as tech companies with zero customers, no legacy source code or database, and little knowledge of the industry they were trying to serve. That lack of knowledge regarding the mission-critical nature of a POS system is a big reason why some of the young cloud POS offerings haven’t gained traction in much more than a juice bar or niche boutique. Not to mention, their customer support often leaves a lot to be desired.
When it comes to cloud POS architecture, POS data is stored on a hosted server in a remote location (“the cloud”) and accessed via an internet connection.
On paper it makes sense. Everything is web-based and app-driven these days, so using a web browser to run your back office from anywhere certainly makes more sense than physically going to the store and sitting down in front of the computer. Cloud POS systems also eliminated the in-store server configuration leveraged by legacy software and replaced it with a cheaper, easy-to-manage server in an offsite datacenter.
However, nobody took the time to ask, “What happens when the internet goes down, and I can’t connect to the hosted server?” The answer is chaos. Betting on the reliability of DSL or cable internet is a fool’s bet. There are so many variables beyond your control that paying for the cost of a local server is worth the investment – there’s no dollar sign on peace of mind.
Imagine how many hundreds or thousands of dollars your business loses when a cloud-based POS system goes down versus the cost of a local server? Precisely.
The Bottom Line
What does this all mean for the restaurant owner? You have several legacy systems that are feature-rich, extremely reliable, but may look outdated to some. On the other hand, you have cloud POS systems that are not as functional or stable but have modern aesthetic appeal.
When it comes to cloud POS vs. traditional POS, our best advice to you is one you’ve heard since childhood — never judge a book by its cover. In this case, never judge a POS system for its marketing appeal. The backend functionality and features are what you should take into consideration. How the system operates will have the most significant impact on your business — not how it looks. Plus, many traditional POS companies are now offering hardware that looks a lot sleeker and more modern than the “legacy POS” equipment you’re used to seeing. And these systems have the benefit of being built-for-purpose to withstand the rigors of busy restaurant and retail environments, unlike consumer tablets that were never really intended for this type of use.