Mahesh,

The biggest difference between the 2 is who is in charge of maintaining the hardware and software for providing ServiceNow.

On Prem you'd have to provide the servers, set them up, and maintain them.   All upgrades and normal maintenance would be performed by the company going the On Prem route.

ServiceNow hosted all this is taken care of.   They maintain the software and hardware which also means that they take care of any security issues as well as it's their job to do things like upgrade SSL and things like that.

The only real benefit of On Prem is that you have COMPLETE control over your data, but you have to seriously weigh that with the manpower necessary to maintain all the servers and software required to run ServiceNow on a day-to-day basis.

-Chris