Nowadays, businesses use many specialized systems (ERP, CRM, HRM, SCM, etc.), each with its own version of customer, product, or employee data management. To avoid conflicts, duplication, errors, and poor customer insights, one more specialized system called Master Data Management (MDM) software is implemented by businesses worldwide.

Studies show that the global Master Data Management (MDM) market was valued at approximately $13.63 billion in 2024 and is projected to reach between $37.84 billion and $40.27 billion by 2029–2032, with a compound annual growth rate (CAGR) ranging from 14.5% to 16.6%.

Alongside MDM gaining popularity, cloud-based technology continues to rise. So why not combine these two trends? The answer is nuanced. While MDM software brings substantial benefits to most companies dealing with diversified data, many may actually benefit more from on-premise MDM solutions. In this article, we will explore the differences between the two approaches, help you decide which suits your business best, and compare leading on-premise MDM solutions available on the market.

Understanding Master Data Management

Before exploring on-premise MDM, let’s clarify what MDM is.

Master Data Management (MDM) is the process of ensuring that an organization’s core data, like customer, product, or supplier information, is consistent, accurate, and reliable across all systems. It brings together business and IT to manage this data effectively.

MDM emerged as a solution to the challenges of managing data spread across multiple systems and applications, especially as data volumes grew.

At its core, MDM involves:

• Consolidating and cleaning master data

• Standardizing and enriching it

• Synchronizing it across systems and processes

The goal is to create a single, trusted source—or "golden record"—for each key data entity. This improves efficiency, reporting accuracy, and decision-making across the organization.

Master data typically encompasses several critical domains, including:

• Customer data (names, contact details, account information)
• Product data (descriptions, specifications, prices, SKUs)
• Vendor or supplier data
• Employee data
• Asset data
• Location data
• Financial data (revenue codes, cost centers, profit-and-loss accounts).

What Are On-Premise MDM Solutions and How Do They Work?

Like all the other on-premise software, on-premise MDM solutions are systems that run entirely on an organization’s own infrastructure, like in-house servers, data centers, and networks. In this setup, the company is responsible for buying, installing, and maintaining all the hardware and software needed to support the MDM system. It’s a more traditional approach that gives businesses full control over their data environment.

On-premise MDM solutions are characterized by:

• Physical installation on company-owned hardware
• Complete control over the infrastructure, software, and data
• Typically involve higher upfront costs
• Highly customizable
• Direct management by internal IT teams
• Physical proximity to other on-site systems and applications

In contrast, cloud-based MDM solutions are hosted and operated by third-party service providers on their infrastructure, accessible via the internet. Traditionally, MDM systems were primarily hosted on-premises, but the rise of cloud computing has driven many organizations to migrate their MDM systems to cloud environments.

On-Premise vs Cloud-Based MDM

With cloud technology growing rapidly, offering lower costs and faster setup, it’s natural to ask: Why would any business still choose on-premise MDM in 2025? Surprisingly (or not), many still do. Here’s why:

1. With on-premise MDM, you can design detailed data stewardship workflows, approval chains, and integration logic that align precisely with your internal processes.
2. On-premise MDM allows full control over how master data is structured, validated, and governed, critical for businesses with complex or industry-specific rules.
3. On-premise MDM can process large datasets and run real-time validation or matching tasks with minimal latency, which is essential for high-performance use cases like real-time customer master updates or product synchronization.
4. Master data often needs to sync in real-time with ERP, CRM, and other internal apps. On-premise MDM simplifies tight, direct integration without dealing with cloud APIs or data transfer delays.
5. On-premise setups often come with more flexible or advanced data quality configurations, enabling deeper control over deduplication, matching rules, and validation logic.
6. MDM systems often store critical business identifiers, like customer IDs, pricing hierarchies, or vendor master lists. Keeping this data in-house helps protect core business operations and intellectual property.

Cloud-based, on the other hand, MDM offers cost savings by eliminating the need for physical servers and ongoing maintenance, with flexible subscription pricing based on usage. It provides easy scalability, allowing organizations to quickly adjust resources as needed without extra hardware investment. Data is accessible anytime, anywhere, improving collaboration across remote or distributed teams. Cloud providers also invest heavily in security and handle all updates and maintenance, ensuring systems stay secure and up to date without extra effort from the organization.

At the same time, cloud-based MDM can limit direct control over data, relying on the provider’s security and policies. It depends on stable internet access, so outages can disrupt data availability. Regulatory compliance may be challenging for some industries. Customization options are often more limited compared to on-premise solutions, as organizations must work within the provider’s platform. Lastly, while upfront costs are lower, ongoing subscription fees can add up and may become more expensive over time.

On-Premise MDM System Comparison

Even though cloud solutions are gaining ground, many organizations still rely on on-premise MDM systems. With several options available, it’s important to understand how they compare in terms of features, flexibility, and suitability for different business needs. Here’s a quick look at the main differences between popular on-premise MDM solutions.

AtroCore

AtroCore positions itself as an open-source Master Data Management platform that empowers businesses to centralize, standardize, and maintain control over their master data. Ensuring data consistency and accuracy across all business domains and systems, and providing seamless data synchronization and integration, it goes beyond standard MDM capabilities.

Why AtroCore:

• Open-source nature provides cost advantages and customization flexibility
• Designed to adapt to unique business needs
• Improves operational efficiency and decision-making
• Provides a foundation for scaling business operations with confidence. Downsides:
• May require more technical expertise to implement and maintain compared to commercial alternatives
• Customization flexibility comes with increased responsibility for development and maintenance

Pimcore

Pimcore positions itself as an enterprise PHP software platform that combines master data management (MDM) with product information management (PIM). The platform has followed a fully API-based approach since its initial release in 2010, bringing seamless connectivity to existing third-party systems.

Why Pimcore:

• Comprehensive multi-domain data management supporting diverse data types across various business functions.
• Built on modern PHP architecture using the Symfony framework and following PHP Framework Interop Group specifications.
• MDM capabilities that enable seamless, cross-functional data integration and governance. Modular software architecture that is extensible through third-party components and plugins.
• Available in both the free Community Edition and the Enterprise Edition.

Proprietary On-Premise Master Data Management Software

There is a difference between on-premise MDM and proprietary MDM, although they can sometimes overlap. This difference lies in deployment versus ownership. On-premise MDM describes the system that is hosted on the organization’s infrastructure, regardless of who developed it. Proprietary MDM, on the other hand, refers to software owned and licensed by a specific vendor, which can be deployed either on-premise or in the cloud. The well-known proprietary on-premise MDM solutions are:

Informatica MDM

Informatica MDM is an enterprise-grade solution offering modular architecture with comprehensive data governance capabilities. The on-premise deployment model provides organizations with complete control over their infrastructure while maintaining the ability to integrate with existing enterprise applications.

Why Informatica MDM:

• Enterprise-grade, modular architecture supporting high levels of customization and control.
• Strong data governance, hierarchy management, and workflow capabilities
• Ability to integrate seamlessly with other on-premise solutions through web services.
• Flexible deployment options including on-premise, cloud, or hybrid configurations
• Extensive customization capabilities, including custom code development and user exits.

SAP Master Data Governance (MDG)

SAP MDG on-premise integrates directly with existing SAP S/4 HANA or ECC infrastructure, offering significant flexibility and control over data governance processes. The solution provides seamless operation without requiring complex server integrations when deployed within established SAP environments.

Why SAP MDG:

• Extensive customization and flexibility capabilities allow organizations to tailor data models to specific business needs.
• Seamless integration with existing ECC or S/4 HANA systems ensures smooth operations.
• Full support for all data models, including Business Partner, Customer, Vendor, Material, and Finance models.
• Complete control over hardware, software, and data security, crucial for sensitive data management.
• Greater flexibility to configure governance workflows according to operational requirements.

IBM InfoSphere MDM

IBM InfoSphere MDM provides a comprehensive solution designed to help organizations create and manage accurate, consistent, and complete master data across the enterprise. The platform follows a hub-based architecture that centralizes master data management while supporting multi-domain data governance.

Why IBM InfoSphere MDM:

• Robust and scalable architecture designed for large enterprises handling complex data volumes
• Comprehensive multi-domain support managing customer, product, supplier, and location data within a single platform
• Advanced data modeling capabilities allowing customization of data models to represent master data entities and relationships
• Strong data governance features, including data stewardship workflows and data quality management
• Golden record management capabilities, identifying and maintaining the best version of master data
• Sophisticated matching and merging algorithms to identify and consolidate duplicate records.

Stibo Systems STEP

Stibo Systems STEP is a leading multi-domain MDM platform known for its scalability and robust features for managing enterprise data. It helps businesses create a single source of truth for product, customer, and supplier information, enhancing data quality and governance.

Why Stibo Systems STEP:

• Multidomain MDM with rich data modeling and governance tools
• Highly stable and powerful platform with proven scalability.
• Flexible deployment options, including robust on-premise configurations
• Strong presence in retail, manufacturing, and consumer packaged goods industries.
• Comprehensive product lifecycle management capabilities provide a single, accurate view of product information.
• Enhanced decision-making support and improved customer experience delivery.

Semarchy xDM

Semarchy xDM is an agile master data management platform designed to deliver fast time-to-value. It supports hybrid, cloud, and on-premise deployments, making it adaptable to various IT environments. Known for its user-friendly interface and quick configuration, it enables rapid implementation and ease of use across business and technical users.

Why Stibo Systems STEP:

• Agile platform with rapid deployment and ROI
• Supports hybrid, cloud, and on-premise models
• Intuitive, user-friendly interface for business users
• Low-code/no-code configuration accelerates customization
• Strong data governance and stewardship capabilities

Syndigo MDM

Syndigo MDM is tailored for product and content-rich environments, combining Product Information Management (PIM) and MDM capabilities. It offers on-premise deployment options alongside cloud, addressing enterprises needing localized control over complex product data and content syndication.

Why Syndigo Systems STEP:

• Specializing in product and rich content management
• Combines PIM and MDM in one platform
• On-premise deployment available for data residency needs
• Supports complex product attributes and digital asset management
• Facilitates omnichannel content syndication and compliance

Profisee MDM

Profisee MDM is built on the Microsoft technology stack, integrating seamlessly with SQL Server, Azure, and Power BI. It offers flexible deployment options, including on-premise, cloud, and hybrid, and is recognized for its cost-effectiveness compared to other enterprise vendors.

Why Stibo Systems STEP:

• Deep integration with Microsoft ecosystem (SQL Server, Azure, Power BI)
• Flexible deployment: on-premise, cloud, or hybrid
• Cost-effective with lower total cost of ownership
• Automated data quality and ML-assisted matching
• User-friendly stewardship and AI-driven data governance

Ataccama ONE

Ataccama ONE is an integrated platform combining MDM, data quality, and governance in a modular architecture. It supports gradual, step-by-step implementation and offers both on-premise and hybrid deployment models, enabling organizations to scale data management capabilities flexibly.

Why Stibo Systems STEP:

• Unified platform for MDM, data quality, and governance
• Modular design for phased implementation
• Supports on-premise and hybrid deployments
• AI-augmented data stewardship and anomaly detection
• Strong compliance and data privacy features

Additional Considerations for On-Premise MDM

Integration Complexity

On-premise MDM solutions often require more extensive integration work to connect with existing enterprise systems. Organizations must carefully plan data flows between the MDM system and various application endpoints, which may involve custom development, middleware solutions, or pre-built connectors.

Hardware Infrastructure Requirements

Implementing an on-premise MDM solution requires a robust hardware setup. This includes servers with enough processing power, ample storage for master data and historical records, and reliable network infrastructure to handle data transfers. Organizations also need backup systems, redundancy measures for data protection, and separate environments for development, testing, and production to ensure smooth operations and scalability.

Data Governance Framework

A successful on-premise MDM implementation depends on a strong data governance framework. This includes clearly defined data ownership and stewardship roles, established data quality standards and metrics, structured change management processes, policies for managing the master data lifecycle, and procedures to ensure compliance and support audits.

Total Cost of Ownership Considerations

When evaluating on-premise MDM solutions, organizations should look at the total cost of ownership, not just the upfront price. This includes software licensing, hardware purchase and maintenance, implementation services, ongoing IT staffing, training and change management, upgrade and expansion costs, as well as energy and facility expenses required to support the system over time.

Security and Compliance Factors

On-premise MDM solutions can be especially beneficial for organizations with strict security and compliance needs. They allow full physical control over data storage, the ability to implement custom security policies, and seamless alignment with existing internal security infrastructure. Organizations also maintain direct control over compliance processes and reduce reliance on third-party security practices.

Key Takeaways

Choosing between on-premise and cloud-based MDM is a strategic decision that depends on your organization's needs, resources, and long-term goals.

On-premise MDM offers strong control, security, and customization—ideal for companies with strict regulations, in-house IT teams, or complex legacy systems. But it comes with higher upfront costs and more maintenance.

Cloud-based MDM is easier to scale, more affordable upfront, and less burdensome to maintain, making it a good fit for agile teams or distributed organizations. Still, it can pose challenges with control, internet dependency, and long-term costs.

Ultimately, MDM is essential as data becomes more central to business. Each organization should assess its infrastructure, budget, and goals, and in some cases, a hybrid model may strike the best balance.