On-premises or Cloud: Which is better for your company?

Posted on January 24th, 2017 by Joel Nimar


cloud on Premises

According to Microsoft, 86% of Small and medium businesses have some applications on a cloud service.  There are, in fact, a lot of good reasons to make the move. There are also cases where on-premises deployment is the best choice. How do you decide?

Software requirements are a basic consideration. Does the cloud service's software meet your needs? Software as a Service (SaaS) is excellent when the right applications are available, but some businesses need more customization. You can look to the cloud to deploy specialized software, but you need to use Infrastructure as a Service (Iaas) or Platform as a Service (PaaS).  If customization and close control are important, it may make more sense to use your own servers.  Are you subject to government regulations on how you handle your data? Is you are subject to HIPPAA, SEC Rule 17, SOC or other regulations make sure your Cloud service provider is compliant.

 Costs are always a consideration but should not be the only one. With a cloud service, you get a choice of a fixed monthly bill on a dedicated server or you can pay as you go and only get charged for the resources you use. Think of your electric utility. You can use electricity only in the rooms you are in and reduce your cost by turning off other lights. Installing on-permises software will have a higher up-front cost, but you can save money in the long run. If the number of employees using it increases, you may have to upgrade your license or increase server capacity.

There are three basic cost models:

  • Pay as you go. You pay for the resources you use.
  • The hybrid model. You pay a monthly fee and get a certain amount of resources.
  • The dedicated or private model, where you pay for the exclusive use of a server.

With the pay-as-you-go model, costs can be less predictable. With a hybrid or private service, you may end up paying for resources you don't use, but you know what you're spending.

For small and medium businesses, cloud services may give the better economy of scale. Large enterprises can run data centers that match or even exceed a cloud service's efficiency.

Security  can give the advantage to cloud or to on-premises, depending on the situation. Keeping data on an on-premises server, behind a strong firewall, can provide strong security. On the other hand, cloud providers' reputations depend on providing secure services, and they have become experts at it. Their buildings are physically more secure than the typical small office, they have around-the-clock monitoring, and they keep strong protections against malware and break-ins. Security is difficult, and putting it in the hands of experts has a lot going for it.

A private cloud service, where you don't share resources with other users, is beneficial. The risks from a shared server are minimal, but a private cloud provides that extra level of security.

Reliability is a key decision point when evaluating IT solutions. The cost of downtime to an organization goes beyond dollars and cents. It effects all parts of the organization and provides outside customers a negative view of the company when they cannot access there website, email etc. This is an area where cloud services win. They use multiple servers, datacenters and multiple data transmission carriers . The machines are subject to 24-hour monitoring. If anything goes wrong, staff members are there to fix it quickly. Only the largest enterprises can build data centers to match cloud uptime.

Flexibility also counts in favor of cloud software services. They're accessible through any modern browser and from any location. Employees can work from remote locations and use mobile devices. On-premises software may be restricted to specific hardware or operating systems, and remote access requires coming through a VPN.

In the end, you aren't evaluating "the cloud" against "on-premises", you're measuring a particular cloud service against the on-premises service that your business can maintain. Anyone can call a remote computing service a cloud service, but you have to look at its reputation, capacity, and level of service. A top-quality cloud service is the right choice for many businesses, but each case comes down to its own particulars. Large businesses or ones with specialized needs may find the on-premises approach works better.

Partnership is the most important factor of all. Who you partner with and bring in to help make your computing upgrade (premises or cloud) maybe the most important factor of all. You need to choose a partner who takes the time to understand the unique needs of your business and has a breadth or product and services solutions to successfully help you make the transition you are looking to accomplish.


Written by Joel Nimar of Pyramid Technology Services. A successful IT services and hardare provider for over 25 years. For thoughts, comments or assistance he can be reached at Sales@pyramidcomputer.com

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