Cloud vs. on-premise: what's the best option for your business?

In a post-pandemic world, it's safe to say that most businesses operate wholly or partially on the cloud. But as operations slowly crawl back to the "old normal," discussions about on-premise vs. cloud computing are also back.

According to IDC's Q3 2021 BuyerView Cloud Pulse survey, as much as 70% of more than 1,300 respondents stated that they expected to return to pre-pandemic levels of operations. Although enterprises are keen to get their employees back in the office, it's starting to look like the future of work is hybrid.

Cloud computing is a term used to describe the delivery of different hosted services over the internet. For example, it can be as simple as running workloads in a cloud environment.

In this scenario, a cloud services provider owns the server hardware and provides secure managed services, including data storage. Cloud computing also takes the form of software as a service (SaaS), infrastructure as a service (IaaS), and platform as a service (PaaS).

A cloud can be public, private, or hybrid. A public cloud is available to everyone, while the private cloud is essentially a data center or proprietary network that offers hosting services for a limited number of privileged users.

As the term implies, a hybrid cloud is a mix of public cloud, private cloud, and on-premises infrastructure that supports computing and storage service environments. Regardless of the approach, the objective remains the same—cost-effectively providing seamless and scalable access to IT services and computing resources.

When businesses host their entire infrastructure and applications on-site, they follow the on-premise computing model. It's also entirely managed by the in-house IT department or a third-party provider.

Since most software today is offered as a service, many businesses that claim to be on-premises are probably working within hybrid environments. However, in some highly regulated industries (like finance), the choice is already made because of strict regulations, and all operations will be hosted in-house.

Although hosting your data assets on-premise is deemed to be more secure, this is essentially a myth. After all, having your data under the same roof doesn't necessarily make it safer. For example, in-house servers are at risk of insider threats. Then you also have to contend with fire, floods, earthquakes, and more.

Although having the responsibility of managing the data center in-house does provide some added control, it can be overwhelming for businesses that don't have adequate resources to support it. As such, human error can lead to a massive data breach.

A private cloud solution provides comparable levels of control that go with hosting enterprise infrastructure on-premises. What's more, even if there is a natural disaster, your cloud services provider will have another data center with a recent backup at a different site to ensure business continuity.

Hosting data on-premises is also more expensive. As managed services providers (MSPs) offer cloud solutions as a service following a subscription model, users only have to pay a monthly or yearly fee (to rent the equipment, software, and services).

Purchasing hardware comes with hidden costs, and unlike the cloud computing model (where costs are evenly distributed across customers), you'll have to bear all of it. For example, if something breaks, you might have to hire specialist engineers to troubleshoot and resolve the problem on-site. This could potentially lead to significant downtime and loss of business relevance for small and medium-sized businesses.

The cloud will always trump on-premise solutions when you look at it in terms of costs and access to technical expertise. Cloud computing is also difficult to ignore because it's highly adaptable, scalable, and proven to improve collaboration while boosting productivity.

Whenever organizations can't move their entire infrastructure to the cloud, it's best to take a hybrid approach. With the support of your cloud services provider, already overwhelmed IT departments can better manage their workloads.

However, it's important for businesses to invest time and effort in vetting potential cloud services partners before committing. For example, organizations must always choose a cloud services provider with a strong track record of ensuring security, uptime, and business continuity.

They should also use robust encryption technologies, penetration testing, and cloud security tools to fortify their infrastructure. This approach will help avert potential problems down the road.

If you're thinking of continuing your digital transformation journey this year, make sure to download our Cybersecurity checklist.