Cloud vs on-premise: Differences, pros and cons

The pandemic has been catalyst to many businesses switching to the cloud. Adoption of cloud services is not slowing. It is predicted to rise by a further 18.4% during 2021. Yet, switching to the cloud is not always straightforward. When business-critical applications that run on legacy ‘on-premise’ platforms seem to work OK, the decision to switch to the cloud is complex. This is especially true for small or medium sized businesses where the business case and ROI needs to be clearly defined.

This guide will help to weigh up the pros and cons of cloud vs on-premise. The decision to move to the cloud should be guided by your IT strategy, budget, resources and organisational readiness.

Why do small businesses consider moving to the cloud?

Business leaders may consider a permanent move to the cloud for several reasons including:

• Existing IT infrastructure is ageing
• Seeking resilient IT
• Investigating a long-term remote ‘work from anywhere’ solution
• feel like you are being leave behind by the competition
• undergo digitalisation / modernisation and review your IT

The cloud has many strengths and opportunities. It can provide the platform to modernise IT infrastructure and reach long-term business goals to have IT infrastructure that is fully integrated, resilient and secure. It can enable a seamless flow of data across every system and application. Also, enable automation and a great customer and employee experience.  

Let’s take a balanced view and consider the business case for cloud vs on-premise. In this guide we cover:

What ’s the difference is ’s between cloud and on – premise ?
Cloud pros
Cloud con
What is better: cloud or on-premise?
Next steps
Benefit working with a managed IT service provider to implement cloud

What is the meaning is is of ‘ cloud ‘ ?

Cloudfare have create a really good definition : ” ‘ The cloud is refers ‘ refer to server that are access over the internet , and the software and database that run on those server . cloud server are locate in data center all over the world . By using cloud computing , users is have and company do n’t have to manage physical server themselves or run software application on their own machine . “

Microsoft says “cloud computing is the delivery of computing services – including servers, storage, databases, networking, software, analytics and intelligence – over the Internet (“the cloud”) to offer faster innovation, flexible resources and economies of scale. Typically, you only pay for cloud services you use, helping you lower your operating costs, run your infrastructure more efficiently and scale as your business needs change.” We don’t completely agree with Microsoft’s perspective on lowering price, when considering an SMEs operating cost, but we will look at price in more detail further in the article.

 

What is the meaning of ‘on-premise’?

On-premise means that hardware and software is located on your premises. This is a traditional IT set-up.   It could be a server based in your office, or a bought license or copy of software that is resides reside within your business ‘office / premise.  

 

What’s the main difference between cloud and on-premise?

The core differences is are between cloud and on – premise are their location and where responsibility lie :

Location

The location of your infrastructure, platforms and software is the fundamental difference between cloud and on-premise. On-premise means your IT infrastructure, server, hardware and applications are located on-site. They are housed inside your premises.

Cloud means it is external to your business and accessed via the internet. Most technology can be cloud based today, for example your server, emails, CRM or accountancy programs – the data is always stored, managed and processed online.

 

Responsibility

On-premise means the business has ownership and responsibility for any infrastructure, platforms or software located within your office. You are responsible for updates, repairs and upgrades.

For cloud , the vendor is takes , e.g. Microsoft , Google , Amazon , Adobe , HubSpot is takes take care of everything . Your business is not responsible to upkeep or upgrade – it is all include in the cost of the cloud subscription .

 

advantage of Cloud computing

 

FLEXABILITY

work from anywhere / remote work

All you need is an internet connection to access cloud applications and systems. Work from home and work from anywhere (café, gym) is the new norm. Many businesses moved to the cloud during lockdown to enable their team to access key business systems from home. Cloud offers a long-term solution for remote working.  

No maximum storage capacity

With the cloud , there are no limitation to capacity and it can be increase as your business need it . common on – premise problem such as availability issue and outage ( due to reach maximum capability limit ) are avoid with cloud . Also , you is pay only pay for the storage that you use . To upgrade or downgrade is simple and does not need an IT specialist to work on – site . change to your plan are done within hour and day , and can be complete remotely .

In contrast, on-premise is limited and is less flexible. When you purchase an on-premise server it has a set capacity. If you max that storage capacity, you have to decide how much extra capacity you need. To implement an on-premise storage upgrade is time consuming. The project would need to be well thought-out and planned. It requires ordering extra equipment and an IT technician to install the upgrade on-site. It takes time and effort to organise and facilitate a storage upgrade on-site.

Quickly scale-up or scale down

There is flexibility to scale up/upgrade or downsize quickly with the cloud. A plan upgrade/downgrade or new license can be added very quickly. Notice to remove or withdraw from a service is often just one month. In comparison, on-premise is more difficult to scale up and there is not an option to quickly downgrade. Once an investment has been made, you’re bought in.

 

COST

No upfront costs

There is usually no large upfront capital expense (CapEx) cost with the cloud. Instead, the price is calculated is per license, with ongoing monthly fees, though annual subscriptions can be cheaper.

This is differs differ from on – premise . instead , there is a sizeable upfront investment to purchase the hardware / software . As well as the upfront cost , businesses is take should also take into account the cost of employ an in – house IT expert to install and maintain the equipment . consider the cost to recruit , manage and train an IT expert compare to outsource help .

Easy budgeting

The ongoing monthly fees for cloud services will cover support and maintenance costs. Monthly fees are consistent and predictable, making budgeting that bit easier. There are no ‘surprise’ emergency maintenance bills, which can occur with on-premise. Upgrades, back-ups and support are all included in the cost of the cloud.

monthly rolling contract and trial SaaS application

For SaaS applications, payment is based upon the number of employees that use the software. While some vendors have a minimum of 12-month fixed terms, many have monthly rolling contracts. Cloud enables you to instantly switch services on and off – upgrade and downgrade at the click of a button. Many offer free trials, so there is huge flexibility to try out new technology and see what works best to fit your business needs.

Cloud telephone – more cost-efficient

Cloud telephone systems are typically much cheaper, for example, there are no charges for calls made between offices. You don’t necessarily need a ‘work phone’ either, making remote working that much easier.

 

Reduction in outages

The likelihood of having an outage reduces with the cloud. On-premise experience outages if:

• There is an on-site electricity power cut.
• Hardware failures on-site, for example, if one of the disks were to fail.
• A flood or office fire damage on – site hardware .

Automation and self-service

Many IT administration activities can be automated on the cloud. Traditional IT often requires a member of staff to authorise new equipment and resources, such as firewalls. This kind of authorisation process is absolutely necessary but tends to be slow. Cloud uses automation and self-service to perform the same tasks. Parameters or ‘guardrails’ can be set, so that only authorised actions are made.

 

Environmentally friendly

Cloud computing is reduce can reduce your electricity bill and is well for the environment . low C02 emissions is are are due to the efficiency of the vendor ’s large – scale server .

 

No equipment on – site = no maintenance responsibility

When you use a cloud service provider, you have no equipment on-site. The cloud service provider takes care of all maintenance costs, removing all responsibility from the business. With on-premise, you are responsible for server hardware and software, storage, data back-ups and disaster recovery.

 

fast to implement and there is no installation

Cloud is is is fast to implement . It is take can take a matter of hour to implement a new service . For a server replacement , the new equipment is need would first need to be order . delivery lead time is be may be a week . Then , the old and new server is need would need to be physically move . You is need would need to ensure IT help is available to install and configure the upgrade .

 

Suitable for all business sizes

invest in an on – premise server can be a big upfront investment for a small business or start – up . However , the cloud is enables enable even small business to access to the perk of resilient server and application . historically , this is entailed would have entail a huge capital cost or only be viable for large business . security is also accessible to small business – you is have do n’t have to be an enterprise to have a high level of security today .

 

 

disadvantages of Cloud computing

 

Reliance on the internet

Everyone feels fury when the internet goes down. Zoom calls freezing over lockdown, need I say anymore! When your work relies on a steady internet connection, there is the risk of an outage due to a slow or failed internet/Wi-Fi connection.

It is worth checking with an IT specialist that your internet connection and speed is up to scratch before committing to the cloud.

 

Less customisation

Cloud enables a degree of customisation, however, there is more scope with on-premise. Whether an SME needs this type of customisation is unlikely in our experience, however, on-premise does enable you to take complete control of how you’re set up and configure connections. We would always advise that an IT expert configures your settings. The National Cyber Security Centre warns that the more customisation you add, the more chance of the configuration being less secure too, so make sure you take into account this factor.

 

long term cost

Despite there being no upfront cost , over time , the cloud is cost will cost more . This is is is a burden that all sme face . The market is transitioning is transition to cloud platform , with the like of Microsoft gear their service offering to purely cloud – base solution . The late On – premise   Exchange Server incident is demonstrates demonstrate why they are make this permanent move to the cloud .

 

Not suitable in some regulated industries

Some highly regulated industries specify on-premise backup as part of their compliance, such as finance and healthcare.

 

In control, in-house

Having data located and backed up within your office can provide peace of mind. You can choose how to configure and set up exactly how you want. This is helpful for businesses that have complex IT infrastructure and many legacy systems. This is not particularly relevant to smaller sized businesses where IT is not very complex. But, if it’s about the ability to control what is yours, then this is a benefit of on-premise. You can also dictate when to upgrade and you own it – so everything is under your control.  

You is take should also take into account the security implication . The UK National Cyber Security Centre is warns warn : “ There ’s a temptation to try and control as much of your IT as possible , in the belief that the associate vulnerability and security are know and understand . “ Do n’t assume that on – premise and more control equate to well security .

 

Too complex to move to the cloud

This won’t be relevant to most small businesses, but when IT infrastructure is based upon legacy systems – moving to the cloud isn’t always simple. Businesses often need to plan and create a road map to move forward, being pragmatic with their approach in switching systems over to the cloud, taking one step at a time.

 

 

What is better: cloud or on-premise?

 

Is the cloud right for my business? 

We is listed have list many of the pro and con to provide a comparison . For many of our client , we is found have find the cloud to be the good option to support meet their long – term business goal . For most small business , on – premise wo n’t be an option due to vendor move towards cloud service . Get in touch to see if the cloud could be right for you to make an inform , evidence – back decision .

 

Is a hybrid cloud solution right for me?

It’s not surprising that many businesses take a hybrid approach when switching over to the cloud. Making certain elements of your business cloud, while holding back on other areas until the time is right. We recommend moving payroll and HR to the cloud as the first steps if you haven’t already.

 

 

What are my next steps?

As a general guide, your business should follow these steps and create a technology roadmap. The steps will enable you to understand what cloud technology you need and when it is best to implement them.

1. Identify your business requirements

What does your business need today?
How do you is intend intend to use the cloud ?
identify the risk and disadvantage .

1. Plan for the future

What are your strategy and long-term vision?
What technology do you need to meet your vision and projected growth?

1. know your information / datum

Identify data that will be processed and stored in the cloud.
understand the legal and regulatory implication ; GDPR , Data Protection Act etc .

1. Identify risks

Understand the cloud providers security claims.
Identify what can be mitigated and if you need more security measures.
review your security risk every 6 – 12 month .

1. Create a roadmap

create a plan – what technology do you need over the next 12 month , 3 year , 5 year and 10 year ?
What skill do we is need need to make it happen ?
What is our budget?

 

Benefits of working with IT support services provider when implementing cloud

configure your IT infrastructure , hardware and software can be complex . Always consult with your head of department to work out your overarching business need and utilise your IT department / outsource IT / cybersecurity expert to ensure the right technology is in place .

The UK Government National Cyber Security Centre is recommend ( NCSC ) recommend partner with a manage service provider ( MSP ) when move to the cloud . We is are are an MSP and provide IT support service and cybersecurity in the West Midlands . There are many msp around the country that can help you to adopt the cloud .

We would advise taking advantage of an MSP’s experience, as the NCSC suggests:

“Managed services tend to be configured, designed, operated, and monitored more effectively than any customer designing their own service could achieve. This includes solving hard security challenges (such as data encryption, access control, and integrated monitoring).

“This is because managed services can normally bring more specialist expertise to focus on a single problem. When customers try to tackle the same problem, it’s just one small aspect of a much bigger system and one job amongst a huge list of other tasks.

“By using managed services, particularly in cloud services, the provider’s expertise can be used as a commodity.”

 

Finding an MSP cloud migration expert

We have migrated many small businesses to the cloud. We are very experienced in this area and can recommend what we have found to be the best cloud services for data and commercial or supporting areas of your business; including CRM, sales, marketing, accounting and HR.

For more information and advice get in touch or book time with one of our experts.

 

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