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When your business needs to expand its IT infrastructure, you’ll eventually need to decide on whether you want to keep your servers on-premises (also known as ‘on-prem’) or migrate to the cloud. With on-prem, your data and servers will be kept in-house while the cloud means your data will be hosted in servers owned by a third-party vendor.

Before you start making any assumptions, let’s cover the top pros and cons for both.

Pros and cons of the cloud

Cloud vs on premise data centre

Before we start, we just want to say that we’re talking specifically about cloud SaaS (Software as a Service) here, rather than cloud computing managed in-house. Most of the benefits below will also apply to in-house cloud computing but you’d be responsible for the setup and ongoing maintenance. Whereas with cloud SaaS, the vendor will take care of it all which generally makes it a more cost-efficient option.

The pros:

  • Storage and functionalities are readily available on an as-needed basis…
  • …so scaling up and down is quick and easy. In theory, any changes can be live within minutes
  • Setup costs are often lower because the vendor will host your data for you. There’s no need to invest in expensive hardware, servers and the like
  • You don’t have to worry about keeping up with system updates as the vendor will automatically release patches
  • You’ll benefit from highly secure data encryption without needing to make additional investments
  • Data is automatically backed up. You don’t need to remember to do it at regular intervals
  • The risk of downtime is very low. And even if downtime does occur, those regular backups mean that you’re unlikely to lose much (if any) of your data. So, business continuity can be ensured
  • Data can be easily accessed when on-the-go. All you need is an internet connection. This is obviously great for field and remote workers
  • The initial setup costs and maintenance are handled by the vendor and it’s a pay-as-you-go, usage-based pricing model. The overall costs of the cloud are often lower than the on-prem alternative

The cons:

  • You’re reliant on a service level agreement (SLA) for data access. Though, reputable vendors will always allow you to access your data whenever you need to and strong measures are in place to prevent unauthorised access
  • Your data is stored on servers that aren’t on-site. But the most reputable vendors have teams of high-quality experts who will monitor and protect your data from unauthorised access or leaks
  • As your data is hosted in the cloud rather than your own servers, you don’t have complete control over the system design (though there can be benefits to this - e.g. you don’t need to design a bespoke system, a project that’s very time and resource-consuming)
  • Obviously being on the latest software version is something IT and other technical experts will always recommend. But with cloud SaaS, the automatic updates can also be a negative as you’re obliged to update to the most recent versions whether you like it or not

Pros and cons of an on-prem data centre

Cloud or on-prem

The pros:

  • You have complete control over system design and maintenance…
  • …and control and visibility over your data too because it’s hosted on your own servers
  • Comply with military-grade security standards. Your server is controlled by your company, not a third party which can offer greater peace of mind if you have extremely sensitive data
  • Sometimes, it can be more cost-effective when you have a large number of users. Cloud SaaS vendors charge based on usage so if you have many users, the costs may rack up. It might be more cost-effective in the long-run to go for on-prem

The cons:

  • Scaling up or down isn’t easy. Whether you need to add more users or functionalities, it can be complex, time-consuming tasks. It takes more than a click of a button (as it usually would with cloud SaaS)
  • The initial setup costs will be high. You’ll need the right hardware, software and a team to handle the project
  • Ongoing costs can be expensive too. E.g. the servers will need to be stored in optimum conditions and you’ll need competent teams to monitor the systems
  • Maintenance can be time-consuming as well as costly. Do you have the resources in-house to keep an eye on the systems and market trends?
  • Updates can be more complex, depending on the extent of your customisations
  • You’ll need an in-house data security team to protect your data and systems 24/7. This may not be as cost-efficient as the round-the-clock support you’d receive as part of a contract with a cloud SaaS vendor
  • Creating a disaster recovery plan is your responsibility. E.g. you need backup servers far away from your primary one and a reliable recovery plan in place in the event of severe data loss

Which is better?

There’s no right or wrong answer here because it depends on your business.

Let’s say your business has extremely sensitive data (such as the kind held by banks and government bodies). While cloud SaaS vendors have high-quality measures in place to protect data, it may give you more peace of mind to go for the on-prem option. But obviously, you need the appropriate resources in-house to ensure your business can support the demands of an on-prem data centre.

That’s why in most cases, cloud SaaS is usually the most flexible, scalable and cost-efficient option. The vendor will take care of the costliest, most resource-consuming responsibilities, such as data security, updates and maintenance. Very ideal if your business doesn’t have the resources or knowledge in-house.


Interested in the benefits of the cloud and how your business can get there?

Maybe you’re exploring the various options out there or you’re bought into the idea of the cloud and want to make sure you’re making the right decision. We’ve got a guide that can help.

It’s a step-by-step guide to migrating to the cloud from a legacy system. You’ll learn how to ensure a successful migration project, from deciding whether the cloud is right for your business to developing a migration strategy, managing the project and the aftercare required.

Click the button below to start reading.


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