Today, on-premise and cloud computing approaches are two of the most popular choices for small to medium-sized businesses (SMBs) who are serious about data storage and business continuity.
For the non-tech savvy business owner, however, it’s easy to get overwhelmed with IT jargon and have difficulty in understanding the real-world impact of on-premise compared to the cloud.
After all, when it comes to making foundational IT decisions for your business, there’s no one-size-fits-all solution. Making the wrong choice now is usually too costly and too impractical to fix in five to ten years’ time.
It’s thus essential to not only understand the difference between on-premise and the cloud but also to understand how it relates to the present and future needs of your business.
In this article, we’ll learn what the cloud and on-premise actually are, as well as the key differences SMBs should keep in mind before making a decision.
Let’s get started:
What is On-Premise?
On-premise is the traditional method of data storage with IT infrastructure physically located on your business premises.
This infrastructure includes servers and networking devices that are outright purchased, owned, and controlled by your business directly. These are typically located in a dedicated server room and is managed by your IT team (either in-house or outsourced).
What is the Cloud?
With the cloud, a third-party provider (such as Microsoft, Google, or Amazon) hosts and manages all the server infrastructure for your business in their off-site environment. Your business pays monthly to the cloud provider for the computing resources you need, and this is provided virtually to your business via the internet.
These cloud servers are located worldwide, and your business does not have to worry about managing or monitoring them. Likewise, there is no physical IT infrastructure required, such as servers and a server room, because the cloud provider handles this for you.
A Comparison Guide for SMBs: On-Premise vs Cloud Computing
Along with email and online banking, internet connectivity also supports internal communication, collaboration, and file-sharing operations within your business itself.
If the internet fails, remote workers and server-side software like accounting, inventory management, and Point of Sale systems on the company network will also go offline – a major downtime scenario. Delays and disruptions are also expected when the internet returns as systems need time to sync and restore.
Cloud Server: With cloud servers, internet connectivity includes redundancy with automatic failover. This means that if the internet goes down in a data center, your business won’t even know the difference. Your operations will continue running just as smoothly without a hiccup.
On-Premise: Internet connectivity with redundancy and automatic failover is also possible with on-premise storage. However, additional connectivity will need to be purchased separately for failover in the event of a connectivity outage. This is an added cost.
Power redundancy is the ability of a device to continue running uninterrupted from another source if the main power supply happens to fail. In the event of a power outage, the server stays on as usual without requiring any manual action or lengthy start-up process.
Cloud Server: Cloud systems rely on hundreds of servers each running multiple power supplies of their own. This means full protection against load shedding and power failures without the possibility of downtime. Cloud providers offer power redundancy at no extra cost.
On-Premise: On-premise servers can also support power redundancy. However, it requires a substantial capital outlay for physical infrastructure. Combined with the heavy upfront cost of on-premise storage, redundant power with on-premise is often cost-prohibitive for a small business.
Failing IT hardware is inevitable. Replacing it comes with upfront costs and downtime that can range from hours to days depending on the affected component.
The solution is redundant hardware. In the case of failure, a duplicate or backup hardware component automatically takes over without human intervention. This ensures zero downtime.
Cloud Server: Thanks to redundant hardware, hardware failures are simply a thing of the past when it comes to the cloud. Businesses using the cloud will not experience any downtime or disruption due to hardware failure as we know it.
On-Premise: There is no redundant hardware with on-premise storage. If you have a hardware outage, then it means that the business will be down until the new hardware is purchased and installed. Active monitoring and maintenance may help anticipate hardware failures, but cannot avoid them entirely.
The IT requirements of a fast-growing business keep changing.
For example, opening new branches or running modern server-side software (such as Sage Pastel) require that your servers can accommodate a growing computing workload. If not, upgrading IT infrastructure to meet business demand is a must. This has mainly cost and downtime considerations when comparing between the cloud and on-premise.
Cloud Server: Whether it’s CPU, RAM, or storage, the cloud enables you to upgrade based on business requirements without having to replace hardware or experience downtime. Any changes are instant – literally at the click of a button. And if your business needs to downscale in the future, it’s just as easy.
On-Premise: Upgrading with on-premise requires a capital investment as well as scheduled downtime. It involves consulting with your server vendor in advance and having a technician physically come to your office and install the hardware. Additionally, if the upgrade requirement is larger than what the server can handle, then the entire server will need to be replaced.
Cybersecurity & Data Ownership
There is little difference in the cybersecurity capabilities of cloud servers and on-premise. Both are extremely secure with modern safeguards. Thus, for the majority of SMBs, cybersecurity should not be a distinguishing factor when deciding between the two.
The difference, however, has more to do with regulatory compliance. In industries with specific types of personal data (such as medical facilities, NGOs, and schools) data control, data protection, and data ownership must be in accordance with the law. These regulations fall under the Protection of Personal Information Act of 2013 (POPIA).
Cloud Server: Depending on the specific nature of your data, the POPIA impacts the cloud significantly more than on-premise. Cloud providers are third-party to your business and the majority hold your data in data centers outside the country – in other words, outside South African jurisdiction. According to POPIA, additional security, assurance, and legal provisions will therefore apply. These added legal hurdles, therefore, make the cloud a less popular choice for industries that have limitations under POPIA.
On-Premise: Data stored on-premise is directly under the control and ownership of your business. Third-party and international regulatory conditions concerning POPIA do not arise. For businesses dealing with restricted data under POPIA, on-premise is the easiest choice.
Investing in a server solution is a major business decision that impacts your budgeting for the long-term. Choose an option that suits your business’s cash flow and anticipate and understand future scenarios, such as maintenance and upgrades, to avoid costly surprises.
Cloud Server: Cloud computing works on a subscription-based model. There is a minimal upfront investment, no recurring upkeep, and no physical infrastructure required. Features such as redundancy and failover, as described earlier, are standard and provided at no extra cost.
On-Premise: In general, on-premise is more expensive than the cloud. It requires a significant upfront investment for physical IT infrastructure which needs to be installed on your premises. Moreover, there are recurring upkeep costs as well as possible additional fees for redundancy, failover, and hardware upgrades if required.
Data Backup Methods
A solid backup plan is essential to business continuity. Regardless of cloud or on-premise, all data is backed up in the same way. Both solutions are extremely reliable and fully support business continuity, rapid disaster recovery, and ease of use.
Along with cybersecurity, backups capabilities should not be a deciding factor when deciding between the cloud or on-premise.
Make the Right Choice with iSite Computers
Not sure what’s best for your business?
iSite Computers is a managed IT services company in South Africa. Since 2008, we’ve been helping SMBs make the right choice between cloud and on-premise solutions.
iSite assists our clients in deciding which route is best for them based on their business needs and requirements. We are not driven by sales targets which would influence our advice and recommendations. Therefore, we support both options in the best interest of our clients and the long-term success of their business and IT environment.