A driver for moving away from on-premises to co-location was the need to provide web servers. With the massive growth of the web around 2000, even companies with a strong background in on-premises hosting found themselves needing to also use co-located web servers in remote data centers, in order to achieve the necessary connectivity. The on-premises approach to deploying and using business software was the most common until around 2005, when software running at a remote location became widely available and adopted. The new, alternative deployment and use model typically uses the internet to remove the need for the user to install any software on premises and had other accompanying benefits: running software remotely can result in considerable cost savings because of reduced staffing, maintenance, power consumption, and other factors.
There is some confusion regarding the use of premise and premises. Some suppose that as "premises" has a plural form, "premise" must be the singular; however, this is incorrect. Despite this, the incorrect usage is now commonplace among technology companies and technology news sources.