Is the Cloud Right for Your Business?

Does the cloud make sense for your business? Discover if the cloud or on-premises solutions are best for your company and why.

Many companies are now asking, “should I put all of my technology in the cloud, or are there other options that make sense?” From startups to established companies, many organizations migrate to the cloud to cut costs and improve efficiency. Cloud is both a broad term and not the only option, however.

On-premises infrastructure solutions continue to be a cost-effective and viable choice for certain businesses and use cases. Discover whether working in the cloud or on-premises solutions are best for your company’s needs.

Understanding the Debate

For the past few years, management continues to question whether the cloud or on-premises software and infrastructure is best. As the debate ensues, it is essential to understand the fundamental differences between the two.  

Cloud software is hosted on a third party’s server at a different location and accessed predominantly through a web browser. Cloud infrastructure utilizes server, compute, storage, and networking resources provided by a third party like Amazon or Microsoft, for example.  

Conversely, on-premises software is installed on your company’s computers and servers at your business location. Each has advantages and disadvantages, depending on your company’s requirements, location, and budget. As new software is developed that spans both the cloud and on-premises installations, the answer gets more nuanced for which is a better choice. The debate for the last five years has been that the cloud is the cheapest and best option mainly because on-premises datacenters were terribly inefficient and didn’t have flexibility and scale.

Benefits of the Cloud

Considering the pros and cons of both types of software and infrastructure is the first step toward making an educated decision. Exploring the benefits of the cloud helps you understand all the buzz about it.

  • Accessibility means users can access applications or resources from any location at any time using any web-connected device, supporting remote work and real-time collaboration.
  • Relatively affordable and predictable initial pricing, often with no upfront costs, with users paying monthly typically for software, maintenance, support services, and back-ups, which helps avoid unexpected expenses.
  • Scalability as you generally only pay for what you use to support business downtime and expansion as it happens.
  • Security policies and default configurations tend to be higher than typical on-premises installations to protect the data stored on the cloud without making costly investments and upgrades.
  • Maintenance is simple as upgrades and compatibility issues are resolved by the cloud software service provider.
  • Deployment happens in just hours or days over the internet, rather than waiting to install on-premises applications on servers, PCs, and laptops.
  • Energy and maintenance costs are reduced when you migrate to the cloud because you are not covering the cost to power on-premises servers and maintain them.

Disadvantages of the Cloud

While the advantages benefit many organizations, there are also disadvantages to moving to the cloud, such as:

  • Cost over time can exceed the upfront investment for on-premises software as cloud applications and infrastructure are paid monthly and sometimes annually to ensure their continuation. Costs are not always as predictable as advertised as everything is pay for use.
  • Connectivity is a challenge in specific locations because reliable internet access is crucial to keep working.
  • Cloud costs do not scale well once the initial benefits are realized, such as fault tolerance, multisite, and ability to scale up new instances and applications quickly. Businesses fully utilizing on-premises infrastructure combined with the cloud may fair better.
  • Customization could be challenging for complicated applications, configurations, or startups looking to get an advantage that might not be available in the cloud, depending on how the cloud software or infrastructure is hosted.
  • Control has also become a hot topic as some companies have suffered outages due to policy changes at cloud providers or privacy concerns.

Benefits of On-Premises Software and Infrastructure

With the good, bad, and ugly on the table about cloud software, consider the advantages of on-premises software.

  • Singular investment in user licenses and equipment for an on-premises solution can mean it costs less over time to own than to pay for cloud software monthly.
  • Control over your hardware, software, and data means you can determine customized system upgrades and configurations as well as security protocols.
  • Reliable uptime is dependent on on-premises components within your control rather than on internet connectivity and other external factors associated with accessing cloud software.
  • The cost to move data over the network may be more cost-effective than the cloud.
  • Scalability of applications, servers, and services has drastically increased with the maturity of virtualized solutions such as VMware, Hyper-V, Kubernetes, Docker, etc.
  • Massive cost reductions are possible by using the cloud as a backup “site” for business continuity vs. additional costly datacenters.
  • Security and ease of configuration have drastically improved with modern firewalls and software-defined platforms. Most all platforms also support easily configuring connectivity securely to a cloud provider.

Disadvantages of On-Premises Software and Infrastructure

As more companies move to the cloud, some find hybrid solutions that combine cloud software with on-premises solutions are the most flexible and cost-effective. Businesses opting for on-premises software should know and mitigate some of the potential disadvantages.

  • The initial investment in on-premises systems can be steep, requiring an upfront purchase and ongoing maintenance and support costs. Lease options, commoditized equipment designed for scale, and effective architectural design can help mitigate this.
  • Applications requiring legacy installation and updates take more time and care because you must update each server and PC to reflect the software changes. This also still exists with the cloud when an application is not Web 2.0. Many specialized business applications are still reliant on installed and maintained software regardless of the cloud.
  • Maintenance is your responsibility, including backups, software and hardware upgrades, and disaster recovery, which can add to high costs. Much of this is mitigated, however, as the cloud requires maintenance as well for backups, management, security, etc. The cloud can be a great way to reduce some of the disaster recovery costs in parallel to on-premises.

Should Your Business Choose Cloud or On-Premises?

With the pros and cons of cloud and on-premises in mind, which one is right for you? Small businesses need capital to invest in on-premises solutions and may struggle to keep up with maintenance costs. Cloud software is fast and easy to implement and easily supports the modern remote workforce. More mature businesses may choose to utilize modern infrastructure in their locations to have better control and potentially achieve savings over time if they can maintain high utilization of infrastructure.  

While many benefits exist for moving to the cloud, there are still many scenarios where on-premises make sense. For example, companies concerned about data transfer costs or large datasets and more mature IT capabilities may want to consider on-premises resources to maintain control and choice. The great news for either solution is that security concerns are no longer a sole factor when choosing cloud or on-premises.  Both solutions can be configured securely and reliably.

If your business isn’t using the cloud in some way today, the great news is, it’s easy to get started where it makes sense. Are you still unsure if cloud or on-premises software or infrastructure is right for you? Do you need help moving to the cloud or integrating cloud software into your current on-premises solutions? Please reach out to us – we would love to chat! Email

Brian Gagnon

Brian is a seasoned technologist boasting 25 years of expertise in crafting, expanding, and refining business ecosystems. His journey in the tech landscape has seen him at the helm of Global Systems Engineering at HGST/Western Digital, shaping strategies as a global architect at VMware, and founding and steering tech companies towards success.

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