On-premises vs Cloud: What’s the Difference?

With organizations looking to cut costs, many are migrating data and operations to the cloud. The cloud offers scalability, flexibility, and speed that traditional on-premises deployments often lack. At the same time, some on-premises assets can be valuable, even in a cloud-facing world. To make informed decisions, business leaders need to understand the differences between on-premises vs cloud and where they fit into corporate IT strategy.

What is On-premises?

On-premises is the software and technology that is located within the physical confines of an enterprise often in the company’s data center as opposed to running remotely on hosted servers or in the cloud.

By installing and running software on hardware located within the premises of the company, internet technology (IT) staff has physical access to the data and can directly control the configuration, management, and security of the computing infrastructure and data.

What is Cloud Storage?

Cloud storage is a storage space available to store data on remote servers which can be accessed from the cloud (or the internet). The data is managed, maintained, and backed up remotely, for which the users generally pay a monthly or per consumption rate.

It uses data centers with massive computer servers that physically store the data and make it available online to users via the web. Users can remotely upload their content, store them and retrieve the data as and when required. With the introduction of the cloud, now you don’t need to purchase servers, external hard drives and memory sticks to carry your data from one place to another.

cloud vs on-premises

Key Differences Between On-Premises vs Cloud

On-Premises vs Cloud: Deployment

With on-premises software,  the company remains responsible for maintaining the solution and related processes. The deployment is done in-house using the company’s infrastructure. In a hosted cloud, the service provider maintains the systems on their server, accessible by the enterprise at any given time with related processes taken care of by the host-cloud service provider.

Control of data 

As seen earlier, in an on-premises model, companies keep and maintain all their data on a server and enjoy complete control of what happens to it. This allows them to enjoy superior control over their data as compared to cloud computing. Companies in highly regulated industries (e.g., banking) with extra privacy concerns are more skeptical about taking a leap into the cloud because of this reason.

In a cloud environment, ownership of data is not transparent. Contrary to on-premises, the cloud allows you to store data on a third-party server. Data and its encryption keys reside within your third-party provider. If there is significant downtime in case of an unexpected event, you would be unable to access that data. Such a computing environment is readily adopted by either those whose business is very unpredictable or the ones that do not have privacy concerns.

On-Premises vs Cloud: Management 

Cloud providers handle so many of the management tasks that cloud users don’t do much more than a monitor and make adjustments through a management dashboard or software tools. An on-premises environment requires hands-on hardware maintenance: replacing drives, managing configurations, maintaining the network, handling power, and even upkeep of the buildings that house it all.

Data security and recovery options

Some people still think that cloud security doesn’t measure up to an on-premises environment. But those people would be wrong (feel free to tell them so, next time you meet them). Your data is actually safer in the cloud because it’s secured and backed up regularly, with security permissions and disaster recovery protocols in place.

In fact, nearly all of the past decade’s biggest data breaches have been from on-premises IT infrastructures. Think about it – if your on-premises system malfunctions or is attacked, that single security breach puts all your data at risk.

On-Premises vs Cloud: Compliance

On-premises: There are regulatory controls that most companies need to abide by. To meet these government and industry regulations, it is imperative that companies remain compliant and have their data in place. This can easily be if all the data is maintained in-house.

Cloud: When opting for a cloud computing model, companies need to ensure that the service provider is meeting the regulatory mandates within their specific industry. It is important that the data of customers, employees, and partners are secure, thereby ensuring privacy.

Costs and pricing

As well as the obvious costs of equipment and maintenance, legacy solutions such as on-premises VoIP phone systems have “hidden” costs associated with downtime and unused licenses. When you purchase the software outright, it may become obsolete before you’ve used it long enough to justify the price!

Cloud solutions are far more cost-effective, with no need to pay for software upgrades or hardware repairs. Because your subscription includes maintenance and support, you’ll see a cost-saving on manpower and troubleshooting.

cloud vs on-premises

On-Premises vs Cloud: Conclusion

A cloud model employs dynamically scalable and virtualized resources as services over the internet. Cloud users rely entirely on cloud platforms for most or all infrastructure management and software execution. A cloud platform, therefore, functions as a virtual storage space.

These very foundations of cloud infrastructure are opposite to traditional on-premises computing models. In an on-premises model, all the resources are stored on local hosts, such as desktops, servers, workstations, tablets, etc., that are on the company’s premises.

Fundamentally, the two models differ in resource control and infrastructure management. While both solutions have their share of pros and cons, no one model is superior or worse than the other. Organizations can choose any one of these solutions depending on their specific needs and end objectives.


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