Running a restaurant involves juggling many tasks, and the point-of-sale (POS) system sits at the heart of it all. The type of POS you choose – traditional or cloud-based – can have a big impact on your daily operations, costs, and ability to adapt. In fact, as recently as 2022, 81% of independent restaurants were still using legacy (on-premise) POS systems, though about 75% planned to upgrade their tech within a year. This shows many restaurateurs are now rethinking their old cash registers and server-based systems. In an age of online ordering, delivery apps, and real-time analytics, the POS system type matters more than ever for running a modern, efficient restaurant.
In this article, we’ll break down what traditional and cloud POS systems are, compare their key features in a handy table, and discuss the pros and cons of each approach. You’ll learn why so many restaurant owners are interested in cloud POS solutions today (mobility, lower costs, scalability – all that good stuff) and how to smoothly migrate if you decide to make the switch. We’ll also touch on how solutions like Sauce’s platform can integrate with cloud POS systems to supercharge your restaurant’s operations. Let’s dive in!
What Is a Traditional POS System?
A traditional POS system (also known as a legacy or on-premise POS) is the classic setup many restaurants have used for decades. In a traditional POS, the software and data are installed and stored locally – usually on a server or computer in the back office and on stationary terminals or touchscreens at the counter. This means all transaction data lives on-site, and the system runs on a closed internal network (not over the internet). In practical terms, if you want to access sales reports or change a menu item, you typically have to be physically at the restaurant where the POS server is located.
Traditional POS hardware often includes bulky terminals and dedicated peripherals (receipt printers, cash drawers, etc.) that are wired into the local network. Setting up a legacy POS can involve a professional installer configuring software on each terminal and the back-office server. Updates to the software must usually be done manually on-site, and if something breaks, you might need a technician to come in for repairs or support. In short, it’s a self-contained system on your premises – which has some advantages in stability, but also limits flexibility.
What Is a Cloud POS System?
A cloud POS system is a more modern approach to restaurant point-of-sale. Cloud-based POS (sometimes called web-based or SaaS POS) runs on remote servers accessed via the internet rather than on a local back-office computer. The POS interface could be a web application or a mobile app, meaning you can use devices like iPads, Android tablets, or even smartphones as your terminals. All your data – sales transactions, menu info, inventory, etc. – is stored in the cloud (i.e. in secure data centers online) instead of on a local hard drive. This lets you access your POS system from anywhere you have an internet connection. For example, you could check your restaurant’s sales or update today’s specials from your home office or phone.
Cloud POS systems are usually provided under a subscription model (Software-as-a-Service), where the restaurant pays a monthly or annual fee to use the software. Because everything is internet-based, setting up a cloud POS tends to be plug-and-play – often just downloading an app or logging into a website and connecting any hardware. Updates are handled automatically by the POS provider and rolled out over the internet, so you always have the latest features without needing on-site installs. Do note that a cloud POS relies on an internet connection to sync data in real time. (However, many cloud POS vendors offer an offline mode that allows the system to keep taking orders locally if the internet goes down, then syncs when connectivity returns.)
Cloud vs. Traditional POS: Key Feature Comparison
To understand which type of POS is better for your restaurant, let’s compare key features of traditional and cloud systems side by side:
| Feature | Traditional POS (Legacy) | Cloud-Based POS |
| Cost Model | Large upfront investment (software license + hardware); may also incur ongoing maintenance fees. | Lower upfront cost – often a monthly subscription. Pay-as-you-go model with minimal initial hardware expense. |
| Setup & Installation | On-site installation by a technician; software installed on local servers and terminals. Updates or upgrades require in-person service. | Easy deployment over the internet; software access via app or browser. Updates happen automatically online without disrupting operations. |
| Hardware | Proprietary, bulky terminals and possibly a back-office server. Generally fixed stations (e.g. front counter PC/touchscreen). | Flexible hardware options – can use tablets or mobile devices as terminals. Little to no on-site server needed, freeing up space. |
| Data Access | Data stored locally at the restaurant. Remote access is very limited (must be on-site to view reports or make changes). | Data stored in the cloud – access from anywhere via the internet. Owners can log in remotely to view sales, change menus, etc., in real time. |
| Updates & Maintenance | Software updates are manual and infrequent. Requires scheduling updates or service calls; hardware maintenance is on-site. | Software updates are automatic and frequent, pushed by the provider. Most support can be done remotely; no need for most on-site technical visits. |
| Integration | Limited integration capabilities. Legacy POS often stand alone, making it hard to connect new apps or online services. | Designed for integration – connects easily with other software like online ordering, delivery platforms, accounting, or loyalty programs via APIs. |
| Scalability | Difficult to scale. Adding terminals or new locations means buying more proprietary hardware and installing software at each site. Multi-location reporting is cumbersome. | Highly scalable. Add new devices or locations simply by connecting to the cloud. Easy to support multiple outlets with unified data, and scale your usage up or down as needed. |
As the table shows, cloud POS systems offer significant advantages in flexibility and remote capabilities, while traditional systems have been the long-standing choice known for local control. Next, let’s break down the pros and cons of each approach in detail.
Pros and Cons of Traditional POS Systems
Even with the surge of cloud technology, traditional POS systems still have some appeal, especially for certain restaurant scenarios. Here are the major advantages and drawbacks of sticking with a legacy POS:
Pros of Traditional (Legacy) POS:
Works without internet
A big plus of a fully on-premise POS is that it doesn’t depend on an internet connection. Even if your Wi-Fi goes down or you have network issues, a legacy POS can continue to process orders and payments locally without disruption. You won’t be stuck if connectivity is a problem – the system is self-contained.
One-time purchase model
Proven reliability
Familiar interface
Cons of Traditional POS:
High upfront cost
The initial cost for a legacy POS can be very steep, often tens of thousands of dollars when you factor in servers, terminals, networking, and installation. For example, a back-office server alone can cost up to $50,000 in some cases. This large capital expense can be tough for small restaurants to swallow, and that’s before annual support fees or update costs.
Limited flexibility and growth
On-site data and access only
Maintenance and updates are a hassle
Risk of data loss or hardware failure
Often outdated user experience
In summary, a traditional POS can keep your restaurant running independently of the internet and may feel comfortable if you’re used to it. However, the lack of flexibility, high costs, and effort needed to maintain it make it a less attractive option for most modern restaurants, especially as business needs evolve.
Pros and Cons of Cloud POS Systems
Now let’s look at the flip side: cloud-based POS systems. These have surged in popularity in recent years, especially in the restaurant industry. Here are the key pros and cons of cloud POS for a restaurant:
Pros of Cloud POS:
Lower upfront costs
Cloud POS solutions are generally much more affordable to get started with than legacy systems. Instead of a hefty upfront purchase, you usually pay a monthly subscription and maybe buy some tablets or terminals. This subscription model spreads out your costs. You also save on the expensive server hardware – one report noted that a local POS server can cost up to $50K, a cost eliminated by using the cloud. Overall, cloud systems tend to be “significantly less expensive” up front because installation is simpler, maintenance is remote, and hardware can be off-the-shelf tablets. For a small restaurant with a tight budget, this is a huge advantage.
Fast setup and updates
Access anywhere, anytime
Easy integrations
Scalability and flexibility
Mobile and tableside functionality
Automatic backups and security
Cons of Cloud POS:
Internet reliance
The flip side of a cloud system’s anywhere-access is that it requires a steady internet connection for full functionality. If your internet goes down and your POS has no offline mode, you could be stuck unable to process card payments or even take orders in extreme cases. Many cloud POS offer an offline fallback (e.g. storing transactions locally until connection restores, or having a built-in 4G cellular backup), but internet dependency is still a concern. Restaurants with very spotty internet or in remote areas might be wary of a cloud POS for this reason. It’s important to ensure your provider has an offline capability and to have a backup plan (like a hotspot or even old-school knuckle-buster for cards) for outages.
Ongoing subscription costs
Potential data/security concerns
Dependent on vendor’s uptime and support
Hardware compatibility
Overall, cloud POS systems tend to win out for most restaurants today because their advantages – flexibility, integrations, remote management, and lower upfront cost – align well with modern restaurant needs. But you should also plan around their few limitations, like internet reliance, to ensure a smooth operation.
Why Restaurants Are Switching to Cloud-Based POS
The restaurant industry is clearly trending toward cloud POS solutions. The convenience and capabilities of cloud systems have led many operators to make the leap from their trusty old registers and on-prem setups. Mobility, cost savings, and scalability are among the top reasons for this shift. Let’s break down why interest in cloud POS keeps growing:
- Adapting to a digital, mobile world: Restaurants today need to meet customers where they are – which often means online or on mobile. Cloud POS enables features like online ordering integration, tableside tablet ordering, and real-time mobile alerts. For example, managers can receive instant notifications on their phone for important events (like a VIP guest arrival or a low inventory alert) because the system is cloud-connected. The ability to use mobile devices for service (taking orders or payments at the table, curbside checkout, etc.) gives restaurants a modern edge and speeds up service. This mobility is a big draw for cloud systems, as it directly translates to better guest experiences and potentially higher sales (faster table turns, more efficient takeout operations, etc.). In contrast, a legacy POS tied to a countertop can’t support these agile service models.
- Keeping costs under control: With razor-thin margins in hospitality, the lower cost structure of cloud POS is appealing. Instead of a huge capital expense, cloud systems are paid out of operating expenses over time. This lowers the barrier to entry for small or new restaurants to get a high-end POS solution. Additionally, cloud systems can reduce labor and errors – for instance, integrating online orders directly to the POS (versus staff re-keying them) saves time and avoids costly mistakes. Automatic updates mean you’re not paying for periodic software upgrades or new hardware every few years; your system capabilities improve continuously at no extra charge. All these factors help restaurants save money. It’s no wonder that in an industry survey, 54% of operators said they planned to invest in a cloud-based POS within the next year. Many see it as a worthwhile investment that will pay off in efficiency and future-proofing.
- Scalability for growth: A cloud POS is ideal for restaurants with big growth plans. Whether it’s opening new locations, adding ghost kitchens, or simply handling more volume, cloud systems scale up seamlessly. You won’t need to overhaul your tech when expanding – just add new sites to your account and go. This is critical for chains and ambitious independent restaurants alike. In one case, a VP of IT at a bakery cafe chain noted that to reach 1,000 units, they needed technology that could “scale at that pace quickly and allow us to use mobility – a clear nod to why they chose a cloud POS platform. Even for smaller operators, scalability matters: cloud POS can easily handle spikes in activity (like holiday rushes or a sudden influx of delivery orders) by spinning up additional devices or integrating new sales channels. You’re not as limited by your infrastructure. As a result, operators feel confident that a cloud system will grow with them, whereas a legacy system might become an anchor holding them back.
- Integration with modern restaurant tech stack: Restaurants are adopting a plethora of tech tools – online ordering, delivery marketplaces, marketing CRMs, inventory management, scheduling software, you name it. A cloud POS serves as a hub that ties all these tools together. For example, you can integrate your cloud POS with Sauce – a commission-free online ordering and delivery platform – so that all orders from your website or social media flow directly into the POS and to the kitchen printers. (Sauce is compatible with many popular cloud-based POS systems, making this a smooth process.) By contrast, with a traditional POS, you might have had tablets for each delivery app and separate systems for phone orders, leading to double-entry and confusion. Cloud POS integration capabilities streamline operations into one unified system, which is a huge efficiency gain. This not only saves labor but also provides better data (since all sales channels are tracked in one place). In today’s connected world, this is a key motivator to go cloud.
- Real-time insights and control: The immediacy of information with a cloud POS helps restaurant owners make better decisions. You can pull up live sales figures, see which menu items are selling out, or even watch orders as they are placed in real time. These real-time insights let you react faster – maybe 86 a dish that’s running out, cut labor early if a storm is slowing the night, or adjust promotions on the fly. Traditional POS would have you waiting until end-of-day reports. The ability to monitor and control the business remotely also gives peace of mind. If you’re on vacation or managing multiple restaurants, you can still keep an eye on things and ensure operations are running smoothly. This level of oversight and agility is a big reason operators are embracing cloud solutions.
All these benefits are driving a major industry shift. While a few years ago the vast majority of restaurants were on legacy systems, that’s rapidly changing. For instance, by 2023 an estimated 61% of fast-food restaurants in the U.S. were using cloud-based POS systems, and full-service restaurants are not far behind. The trajectory is clear: cloud POS is becoming the new norm as restaurants strive to stay competitive and meet customers’ expectations in the digital age.
Migrating from a Traditional POS to a Cloud POS
If you’re currently using a legacy POS and are considering switching to a cloud-based system, the move can feel daunting – but it doesn’t have to be. With proper planning, transitioning to a cloud POS can be smooth and well worth the effort. Here are some practical steps and tips for migration:
- Evaluate your needs and choose the right system: Start by identifying what you need from a new POS. Make a list of pain points with your current setup (e.g. “can’t integrate online orders” or “reporting is too limited”) and prioritize features you want in a cloud POS (such as mobile ordering, specific integrations, CRM capabilities, etc.). Research the cloud POS options that fit your restaurant size and segment. There are many vendors out there – some specialize in quick-service, others in full-service, etc. Compare systems and read reviews. (Tip: Check out guides like our best restaurant POS systems review to get an overview of top options and their features.) Focus on a solution that addresses your core needs, is user-friendly, and has good support. Also ensure the pricing aligns with your budget (watch out for per-order fees or add-on costs that some providers might have).
- Plan the switch for a quiet time: Timing is key. Don’t swap out your POS on Friday night at 7pm! Aim to schedule the go-live for a slower period – perhaps early in the week, or between service shifts – to minimize disruption. Some restaurants do the changeover during a planned closure or overnight. Also, give yourself overlap time: you might run the old and new systems in parallel for a day (taking a few orders on the new system to build confidence) before fully switching. Inform your staff in advance when the change will happen so everyone is prepared.
- Set up hardware and infrastructure: Work with your cloud POS provider to get any required hardware set up. This could include tablets, stands, receipt printers, network routers, kitchen display screens, etc. Ensure your internet connection is robust – you may want to upgrade to a faster or more stable ISP plan if needed, and consider having a secondary backup connection (like a hotspot or LTE router) for redundancy. Install the POS app on all devices and double-check that each device can log in and communicate with any printers or card readers. It’s wise to do a dry run where you input a few test orders to see that everything prints correctly and payments process. The cloud vendor’s onboarding team can usually assist remotely during setup.
- Migrate your data: One of the most time-consuming parts of switching POS systems can be inputting your menu, modifiers, prices, taxes, and other data into the new system. Many cloud POS providers offer import tools or will help convert your database if coming from a common legacy system. Gather all your menu info, inventory counts, employee profiles, and customer data that you want to bring over. Back up data from your old system (export reports, save customer lists, etc. just in case). Then populate the new POS with your menu and settings. Double-check items for accuracy. This is also an opportunity to clean up – you might simplify your menu structure or eliminate old buttons that aren’t needed anymore. Take advantage of training or support resources during this phase; the vendor can often do bulk imports if you provide data in a spreadsheet format.
- Train your team: A POS is only as good as the people using it. Schedule training sessions with your staff on the new cloud POS before you go live. Most cloud systems are pretty intuitive (if your staff can use a smartphone, they’ll pick it up quickly), but you want everyone to know how to input orders, process payments, handle refunds or comps, and so on. Also train any managers on back-office functions like pulling reports or updating the menu. Many providers have online tutorials or even one-on-one training available. Encourage your team to practice with the system during off-hours – perhaps running mock orders or role-playing scenarios. The smoother your staff are on day one, the easier the transition.
- Go live and monitor closely: When you flip the switch to the new POS, be on-site (or have a trusted manager on-site) to support the staff and handle any hiccups. Keep the old system on standby (don’t return that old register right away) just in case you need a fallback for the first day or two. But ideally, you won’t need it. Monitor the new system closely – check that sales are recording correctly, receipts look right, kitchen tickets are formatted okay, etc. It’s normal to make a few adjustments in the first week (like tweaking print routing or button layouts once you see real-world usage). Communicate with the POS provider if any issues arise; cloud companies can often fix configuration issues or bugs remotely very fast.
- Leverage new features and integrations: Once you’re comfortable with the basics, start taking advantage of those great features that your old POS lacked. For example, integrate your online ordering and delivery services so that orders from your website or platforms like Sauce flow directly to the POS. (Since Sauce’s online ordering system integrates seamlessly with modern cloud POS systems, you can easily connect it so that all your web and social media orders auto-print in the kitchen, updating inventory in real time – no more manually re-entering tickets from a tablet.) Enable any useful add-ons like loyalty programs or advanced reporting dashboards. In short, make the most of your new tech stack. It can truly transform your efficiency and open up opportunities (like capturing customer emails for marketing, optimizing your menu based on sales data, etc.).
- Phase out the legacy system: After a successful transition period (perhaps a couple of weeks when you’re confident in the new system), you can decomission your old POS. Be sure to save any historical data you might need for accounting or tax purposes from the legacy system. Then, whether you sell the old hardware or recycle it, enjoy the fact that you no longer have to maintain that aging server in the closet!
Switching from a traditional POS to a cloud POS might seem like a big project, but many restaurants have done it and say they never want to go back. The keys are choosing the right system for your needs, prepping your data and team, and using the resources available from the POS provider. With those in place, your restaurant will soon be reaping the benefits of a modern, cloud-based POS – from smoother operations to easier upgrades and integrations with services like Sauce.
Which POS System Is Better for Your Restaurant?
After weighing the differences, which is better – cloud POS or traditional POS? For most restaurants today, a cloud-based POS system is the superior choice. The ability to access your system from anywhere, integrate all your online and offline sales channels, get instant updates, and avoid huge upfront costs gives cloud POS a clear edge in the fast-paced, tech-driven world of modern dining. Cloud solutions empower even small independent restaurants with tools and insights that were once only available to big chains with expensive software. They also adapt as your business grows or customer expectations change, which is crucial in an industry known for its razor-thin margins and need for agility.
Traditional POS systems, on the other hand, are becoming legacy for a reason. Unless you operate in an area with extremely unreliable internet and absolutely cannot tolerate any connectivity issues, sticking with an on-premise POS will likely put you at a disadvantage.
The old benefits of legacy systems (offline capability and familiarity) are now largely outweighed by their downsides – high costs, limited functionality, and lack of integration. Many cloud POS options offer offline modes to cover internet outages, and staff tend to learn tablet-based systems quickly, so the historical advantages of legacy are not so compelling anymore.
That said, the best POS system is one that fits your restaurant’s specific needs. A high-volume nightclub might prioritize offline stability and choose a hybrid cloud solution with a local server backup. A small café might value extreme simplicity and low cost, finding a basic cloud POS on an iPad perfect. The key is to assess what matters most for your operations (speed, features, budget, support) and choose accordingly. In 2025 and beyond, the vast majority of the time that will lead you to a cloud-based POS platform.
In conclusion, cloud POS vs. traditional POS isn’t just about technology – it’s about your restaurant’s future. A cloud POS can unlock new efficiencies, revenue streams (like integrated online orders), and data-driven decision making that a legacy system simply can’t match. As more restaurant owners are discovering, the question isn’t so much if you should modernize your POS, but when. And with proper planning and the right partner, making the switch can be one of the best operational upgrades you undertake for your restaurant.
Ready to explore what a modern cloud POS and integrated online ordering can do for your restaurant? Sauce’s platform works hand-in-hand with leading cloud POS systems to help you maximize direct orders and streamline operations. It might just be the “secret sauce” you need to spice up your restaurant tech stack!
Frequently Asked Questions (FAQs)
What is the main difference between a cloud POS and a traditional POS system?
The primary difference lies in where the data is stored and how the system is accessed. A traditional POS (legacy POS) stores data on local servers at your restaurant and runs on a closed network (offline). It typically uses fixed terminals and you must be on-site to use it. A cloud POS stores data on remote servers (the “cloud”) and is accessed via the internet, usually through a web portal or app. This means you can log in from anywhere and use devices like tablets or smartphones as terminals. In short, traditional POS is on-premise and not internet-dependent, while cloud POS is web-based and offers remote access and broader integration capabilities.
Will a cloud-based POS still work if the internet goes down?
It depends on the system, but most modern cloud POS systems have offline functionality to handle internet outages. When offline, the POS may store transactions locally on the device. For example, some cloud POS (like Toast) support a “fully functional offline mode” that lets you continue taking orders and even processing credit cards to some extent during an outage. Once the connection is restored, the data syncs to the cloud and any credit card transactions queued are processed. However, not all cloud POS are equal in this regard – it’s important to ask the vendor about their offline mode. It’s also wise for a restaurant to have a backup connection (like a mobile hotspot) as a contingency. Traditional POS systems don’t require internet at all, so they aren’t affected by outages – but they also can’t do any cloud-based functions in the first place. For most restaurants, the occasional internet hiccup is manageable with the safeguards in place, and the advantages of cloud connectivity far outweigh this concern.
Are cloud POS systems more cost-effective than legacy POS systems?
In general, yes, cloud POS tends to be more cost-effective, especially for small and mid-sized restaurants. Traditional legacy POS usually involve a big upfront purchase (hardware, licenses) and ongoing maintenance contracts. Cloud POS has a much lower startup cost – often you just buy a couple of iPads and subscribe to the software monthly. There’s no need for a $5,000 server or expensive proprietary terminals. One analysis showed legacy POS setups running into the tens of thousands per year, whereas cloud POS subscriptions range from a few hundred to a few thousand per year depending on your size. Over time, a legacy system might cost more in updates and lost efficiency as well. That said, with a cloud POS you will be paying fees continuously, so you should calculate the 5-year or 10-year cost to compare fully. Also, if you already own a legacy system that’s fully paid off, the calculus might differ until you consider the indirect costs (limited features, integrations, etc., which can affect your revenue). In pure dollar terms and value gained, most restaurants find cloud POS to be a smarter investment nowadays.
How do I switch from a traditional POS to a cloud POS without disrupting my business?
Switching POS systems can be smooth with proper planning. The key steps are: choose the right time, train your staff, and run both systems in parallel briefly. Aim to install and configure the cloud POS during a slow period (e.g. early morning or a day you’re closed) to avoid interrupting service. Input your menu data and test the new system while your old POS is still running, so you can iron out any issues. Train your team on the cloud POS ahead of launch – many systems are intuitive, but you want servers and cashiers to feel comfortable before it goes live. On switchover day, consider processing a few test transactions or even running the old and new POS simultaneously (one as a backup) for a few hours. Most importantly, utilize support from the POS provider – they often have onboarding specialists who will help migrate data and assist during the go-live. By preparing in advance and doing the cutover during non-peak hours, you can minimize disruption. Many restaurants are pleasantly surprised that after an hour or two of adjustment, it’s business as usual – just on better technology.
Can cloud POS systems integrate with my restaurant’s other tools (online ordering, delivery, accounting, etc.)?
Yes – in fact, strong integration capability is a hallmark of cloud POS systems. Cloud-based POS platforms are built with connectivity in mind, often offering APIs and app marketplaces to connect with all sorts of third-party services. You can link your POS with online ordering and delivery apps so that orders from your website or platforms like UberEats flow directly into the POS. You can integrate with accounting software (QuickBooks, etc.) to automatically sync sales data, or with inventory management tools to deduct ingredients as dishes are sold. Many cloud POS also integrate with reservation systems, loyalty and marketing programs, payroll providers, and more. For example, Sauce’s commission-free online ordering platform can be integrated with popular cloud POS systems – when a customer places an order through your website or social media, it pops into your POS and kitchen printers seamlessly, just like an in-house order. Legacy POS systems generally lack this level of integration; they might require expensive custom interfaces or simply can’t connect to newer digital services. With a cloud POS, your tech stack becomes unified, saving you time and ensuring consistency across your operations. Before purchasing, it’s a good idea to list out the integrations you need and confirm the cloud POS you choose supports them (either natively or via third-party connectors).
