The cloud solution is a quick start, where no installation and configuration is required. You get instant access via web browser or mobile app. 

Cloud service Bitrix24 can be the optimal solution for companies with up to 100 employees.

Tariff plans take into account the capabilities of companies.
You can pay monthly for using portal and its tools.

On-Premise version is a fully customizable system.
When you need access to the source code for customization according to your scenario or for integration with other software, if you want to store the data on your own server - On-Premise version enters the battle. 

Bitrix24 On-Premise version is sold as an end license - you pay only once and use license forever. There is an option to update portal every year to better version with new functional tools.