IT infrastructure hosted physically at the organization's own facilities. The internal team is responsible for the hardware, software, maintenance, and security.
The starting point for cloud migration questions. AZ-900 and CLF-C02 compare CapEx (on-premises) vs OpEx (cloud). The move from on-premises to cloud is the baseline scenario in many case studies.
On-premises is a concept that can show up on the exam. Check the full guide to see it in context.