I realize that this is a bit of an open-ended question, but there are complaints regarding the response time of on-demand Jira. It typically seems to take about 2-5 seconds to load a JIRA issue or run a filter.
If bring JIRA in-house and run it on a well-provisioned machine, how much might the response time improve?
It would be extremely rare to get worse performance, but it is possible. If you use a virtualized environment with minimum memory, you can get worse performance. If your JIRA database is on the same machine, then make sure you have plenty of memory and cap your database so it does not use up all the memory.
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