Having a physical hardware managing your network is still very much a requirement for enterprise-class businesses. Networks are self- contained and non-reliant on the outside world however, if you're a larger enterprise and say, in the hospitality or retail sectors being mindful of flexibility and scalability is key. Successful businesses will always need to expand, hardware-based WLAN management will be licensed to a specific access point quantity and will need to be increased usually in increments of ten or more and will typically have a limit of how many access points it can take, while with cloud-based management you can add access points on a singular basis and are scalable in the thousands.
There are many WLAN manufactures who favour the cloud over hardware. Industry leader Ruckus up until recently have always favoured the hardware based approach however the arrival of their new carrier-class solution vSCG (Virtual Smart Cell Gateway) will give service providers the ability to deploy a very scalable, resilient, and fully featured offering that is backed by service level agreements. There are also other advantages. Integration of other Ruckus services such as their new location based service SPoT (Smart Position Technology) is achievable making their new cloud-based management an extremely powerful tool for any enterprise.
Shifts from hardware to cloud-based services are not going to be slowing down anytime soon, but hardware WLAN management still has its place.