On-premises servers are physical servers located within a company's own facilities. They are used to store, manage, and process data locally, allowing organizations to have direct control over their hardware and software. This setup can be beneficial for businesses that require high security and customization. These servers typically require significant upfront investment for hardware, maintenance, and energy costs. Companies must also manage updates and backups themselves, which can be resource-intensive. In contrast to cloud solutions, on-premises servers provide a stable environment for sensitive data, making them a preferred choice for industries like finance and healthcare.