Traditional ETL tools are typically on-premises solutions. They require local servers and hardware to process data. These tools often involve significant setup and maintenance, including managing the infrastructure, scaling the resources as data grows, and handling software updates. Cloud-based ETL tools operate in the cloud, eliminating the need for local hardware. These tools are often more scalable, as they can easily adjust to handle increased data volumes without significant manual intervention. They also benefit from automatic updates and maintenance handled by the cloud service provider.