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Starting with a basic explanation in case you aren’t familiar with the terms. Those terms refer to the infrastructure where a product is hosted. On prem is short for on premise, meaning that the solution is hosted on a server that the customer maintains. A cloud security solution is used for products that are hosted in the cloud, meaning that the server is in a another company’s data center that the customer doesn’t control.
Let’s say a company offers security solutions for e-commerce. The on prem solution would be for customers who host their e-commerce platform from their own data center. The cloud solution would be for customers whose e-commerce platform was hosted on a cloud provider like AWS or GCP.
Different authentication, protocols, technology stacks but a key difference I can highlight is that on prem, network segmentation is the “default security perimeter” while in cloud native solutions identity is the new security perimeter. That is without leaving out the fact that everything on-prem related to (not only) security is the sole responsibility of the company while in the cloud it is based on a shared responsibility model (with increasing responsibility on the csp-side the more you move up the IaaS/PaaS/SaaS stack). Hope it clarifies a bit
Some other key differences, and why companies like the cloud is convenience, speed to delivery, and cost.
Back in the on-prem days, if you wanted a new application, you might have had to requisition some HW, get it delivered, installed, provisioned, validated, etc before you could put your application on it.
In the cloud era, you can provision new resources in minutes vs days / weeks / months. It allows businesses to be more nimble. It probably also enables whole new classes of value to be realized as you can try things quickly, get some data, and make a decision, which ties into my next point.. cost.
With on-prem, you have higher fixed costs (i.e. the networking & computer hardware, power, cooling, etc) that you're paying [and some of which are depreciating] whether or not you use them. With cloud, you generally pay for what you use, which lets you scale up and down based on needs and have a ton more cost flexibility.
Rising Star
Cloud is software, like digital antivirus stuff.
On-Prem is like actual security guards with guns roaming around the data center.