There is no simple answer to the question of which is better: On-premise or Cloud? Many large, established companies in the market wonder if it is worth transitioning their technology and infrastructure systems from On-premise to the cloud. On the other hand, many new companies wonder if they should invest their recent capital and growth in On-premise systems. To make an informed decision, it is important to understand the differences that each option has to offer.
Let's look at the advantages and disadvantages of both.
Advantages of the Cloud
One of the primary functions of any company is to store information, after all, servers are the backbone of the organization. This data helps us stay in touch with employees and allows us to connect with them wherever they are. In the past, servers were kept within the company as that was the only available option. But now, there is the option to store them in the cloud.
One of the most important ways the cloud interacts with your company is through data storage. Unlike On-premises servers, the cloud uses external servers to store your data, which is managed by an external company.
The advantages of the cloud are numerous, let's review a few:
- Reduce IT staff responsibilities: Since your data stored in the cloud is managed by another company, your IT staff won’t waste time installing new updates or patches to the software. This way, they can focus on other important tasks.
- Eliminate large upfront capital expenditures: While On-premise expenses are considered capital expenses, cloud services are operational expenses. Typically, On-premise requires a large initial investment to purchase the equipment and install it in the office; because the cloud is managed externally, there is no need for this large initial investment. Instead, companies pay an annual or monthly subscription.
- Fits your budget: To help companies keep initial costs low, organizations usually pay for cloud storage on a monthly basis. Regardless of whether you are scaling or not, most cloud storage can be adjusted to fit your budget. Moreover, cloud services can be adjusted at any time. This flexibility is ideal for companies that are constantly changing and don’t want to commit to paying for a service they may not need in the future.
- Automatic and constant backups: The cloud offers users peace of mind since, in the event of issues or if local files are deleted, the lost information can be quickly found. The ability to access information that would have been lost if stored in a single place within the company reduces the risk of losing critical data.
- Scalable to the company’s needs: The cloud is designed so companies can scale quickly. Need extra terabytes to store more data? Simply upgrade your plan with a couple of clicks. Unlike having your own servers that would require new hardware to be installed, cloud servers allow you to expand quickly and easily. For companies with rapid growth, this means they don't have to worry about a lack of equipment slowing them down.
Disadvantages of the Cloud
- Your internet connection determines service quality: If you have cloud service, a good internet connection is a must. If you have a slow connection, accessing or downloading files can be a tedious experience. For companies that need to work critically and urgently, a slow connection can lead to major problems.
- Costs can increase over time without realizing it: Although quick scalability is an advantage, it can also backfire and become costly if left on autopilot. The cloud works with a consumption model: the more storage, the higher the monthly cost. The company needs to stay alert to the growth in consumption to avoid surprise fees.
- Your data could be less secure: When working with an external company that provides cloud services, you are entrusting the management of your data to another party, which is supposed to keep it secure. There is always the risk that unauthorized personnel may gain access to it. Therefore, it is important to research the service you want to hire before starting with the new system.
- Local regulations: Some places have legal regulations that require certain data to remain local. Some types of information critical to the company's operation may not be suitable for cloud storage. Companies must have written guidelines and a usage policy to accompany cloud storage services.
Advantages of On-Premise
- Can function without internet: One of the greatest advantages of On-premise systems is that users do not need the internet to access data. You can access it anytime without fear of sudden disconnections that could delay the workflow.
- Lower monthly and long-term costs: While the initial upfront cost is considerably large, over time, the monthly savings, depending on usage and time, will amortize the initial investment. Additionally, if your business doesn’t rely heavily on advanced internet, the monthly cost for that resource drops significantly.
- Greater security: Unlike the cloud, which is vulnerable to third parties and aggressively targeted by hackers, On-premise systems are completely restricted to anyone other than authorized personnel. On-premise servers are not accessible outside the local network since they do not store data online.
- Greater control over servers: Some companies prefer dedicated servers specifically designed to handle their own needs. Instead of asking your cloud provider for new features or an upgrade to your service plan, the company can manage it autonomously.
Disadvantages of On-Premise
- Requires more IT staff: If the company decides to go On-premise, it also needs trained staff to maintain and manage it. This could mean hiring more staff specifically dedicated to server maintenance as the organization grows, which increases costs.
- Maintenance costs: In addition to the initial capital investment for servers and hardware, software and licenses are needed to power and repair the system. Often, a piece of hardware needs to be replaced due to malfunction. These improvements and general maintenance should be done at least once a year, which adds to the initial costs.
- Risk of data loss: Data is the most sensitive part of any organization; losing it would be devastating for both the company's operations and its reputation. With On-premise, any system failure could compromise the stored information and result in permanent data loss. That's why a good practice for companies with On-premise systems is to have regular backups in an offsite location.
- Limits growth capacity: If your company scales quickly and needs more storage space or additional capabilities, it is harder to make this change within an On-premise infrastructure. While with cloud services, you can expand your plan with just one click, On-premise systems require installing new hardware and dedicating personnel to the expansion.
Conclusion
While cloud-based systems are the future, due to their low cost, flexibility, and reduced responsibility, On-premise systems are not going anywhere in the short term. Companies will continue to use them because they are functional and because they will want to amortize the large investment made before thinking about migrating to the cloud.
On the other hand, it’s impossible to give a definitive answer to which is the best system without first understanding the characteristics and individual needs of the company that wishes to choose either platform. Every organization has unique and personalized requirements. That's why the IT team, finance team, and decision-makers within the company need to conduct a thorough analysis of all the variables in order to make the best decision.
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