In the modern age of enterprise IT, there are a wide variety of factors that a business or organisation must give considerable thought in order to decide on whether a cloud-based infrastructure is the correct option for you and your company.
Equally, there are a multitude of companies that refuse to take the jump into the world of cloud services and instead rely upon more traditional or legacy, on-premise software and hardware to complete their business functionalities.
We’re going to take you through the benefits, drawbacks and differences between the two service models (Cloud vs On Premise IT) to give you the information and facts you need to make an informed decision on which model is best suited to help you and your organisation achieve the goals and aspirations you have.
On Premise vs. Cloud
It’s little surprise that the popularity of cloud computing has experienced such growth as it has. Its appeal and services offer flexibility for organisations that have not been available before aiding in everything from time efficiency and cost efficiency to improving business processes that allow accelerated growth and direction changes.
Contrastingly, on-premise functions, implemented on company-owned servers and protected behind an organisation-wide firewall, has been the sole option for the longest time. This service may long continue to serve organisations completely adequately if a company is reluctant to change a process that has served them well. Furthermore, on-premise software’s are ultimately reliable, safe and offer organisations the ability to maintain the degree of control over their systems. However, the general consensus among IT executives is that in order to achieve business goals, businesses will need to implement new cloud and SaaS applications into their entire business model. Later on, we discuss some statistics that illustrate this point further.
On-Premise Software
Whether an organisation inputs their applications in the cloud, or whether it makes the decision to withhold them on-premise, one thing will always take priority, data security. Some companies in industries that are highly regulated may not make the decisions about keeping their functionalities in house or not. And, knowing data is located within home servers can offer a degree of comfort.
On-premise software requires an enterprise level license or a completely bespoke copy of the software for your company. This software is licensed and lives on the premises entirely, giving some peace of mind that data is safe. So, if a company requires this level of security, would they benefit from a cloud option? In short, yes.
On-premise software and capabilities do have a variety of downsides. For one, the costs associated with dealing and sustaining the processes are incredibly higher than cloud options. On-premise setups require bespoke servers, licenses for software, integration functionalities and in-house IT employees available 24/7 to fix and support in case any issue arises. There are still other costly factors to consider, such as equipment malfunctions, repairs and replacements.
Cloud Computing
Cloud functions differ from on-premise software in one major way. Standalone companies, like Premier IT, host everything in-house in an environment similar to on-premise for you in a cloud environment created for your company. This enables companies to utilise services required on a pay as needed basis. It also allows firms to scale up and down, change strategies, user requirements and business growth as needed.
Cloud-based servers utilise revolutionary virtual technology that hosts applications from a company offsite. There are no expenses for physical equipment, regular data backups are conducted, and companies only pay for what’s needed. For any company that has accelerated growth planned on a worldwide basis can benefit from cloud services even more as it allows them to connect with partners, clients and customers anywhere in the world with very little effort.
Moreover, cloud computing enabled almost instant provisioning as everything is pre-configured for the company. Therefore, any software integrated with your process is ready to use in an instant once the company is subscribed to it. This means that you make a huge saving on expenses that would have occurred from an on-premise model such as installation and configuration. It also means your employees and customers have access to the new application immediately.
Cloud services are based on subscriptions, and while there may be some form of contract related terms, there is the option to get a feel for software and services before committing to it on the long term. This is something you don’t benefit from in an on-premise model, with huge initial investment costs unavoidable.
Key Differences of On Premise vs. Cloud
As explored previously, there are a multitude of differences between an on-premise model and a cloud system. The path must be the right fit for your organisation, but as technology continues to develop and evolve, you could be missing out on more and more functions that would serve your businesses growth and efficiency well. Here are some of the key differences between the two models:
Implementation
On Premises: In an on-premises model, business IT resources are implemented in-house and within an organisation’s IT structure. A company is then responsible for supporting the model and all processes related to their systems setup.
Cloud: Cloud computing has many different forms, such as public cloud, private cloud and hybrid cloud. In a public cloud service, the entire model is hosted on the premises of the service provider, but companies are able to access the resources and have unlimited use of the services at any time.
Cost
On Premises: The company is solely responsible for the deployment, continuing costs, hardware, power, space, repairs and replacements of their setup. There are also very high costs to set up on-premise IT services as a new business. You must factor in purchase and initial investment costs, before considering the ongoing costs that on-premise IT generates.
Cloud: Those companies opting to utilise a cloud computing service are only required to pay for the specific resources they need to use and benefit from the absence of maintaining and repairing equipment. The price will change based on the level of usage. With its low initial outlay, you can reinvest money into other areas of your business, further encouraging business growth.
Control
On Premises: In an on-premise setup, companies retain their data and information in its entirety and are responsible for the security of it. This can be a burden as well as a benefit.
Cloud: In a cloud-based model, there is sometimes some ambiguity over the ownership of data and information. In short, the data is always owned by the home company, but is managed and secured by the cloud service provider. This includes encryption keys and databases.
Security
On Premises: Some companies that have very sensitive information in their systems, like banks or government organisations must maintain a very high level of security over their owned data. Security is often the main concern with organisations despite the negatives and high price tags associated with on-premise setups.
Cloud: Security concerns still stand as a point of contention for cloud-based services. There is a heightened risk of breaches in a cloud system. However, the advancements in technology render this risk less each and every day.
Accessibility
On Premises: The flexibility of accessing your data and systems externally are reduced severely by restricting your setup on-premise and can also result in your company being unable to adopt new technology and applications that increase your capabilities to work remotely.
Cloud: With a cloud service you can gain access to your information and data, as and when you require it, regardless of location.
Hybrid Cloud Solutions
The discussion around the pros, cons, benefits and drawbacks surrounding on-premise it vs cloud computing setups is a worthy consideration. Companies of all shapes and sizes are discussing and deciding which fits their business model better all over the world. However, an emerging solution is becoming more and more popular with organisations globally.
A hybrid solution is a tailored service combining the best features of cloud-based systems and on-premise models. This type of model depends on a variety of factors such as availability but can be a very profitable solution for those struggling to release an on-premise model entirely. It’s also a great way to begin implementing cloud-based services into your wider model without causing too much disruption to your processes and functionalities.
Statistics of On-Premise vs Cloud IT Services
According to Gartner, cloud-based services have witnessed a 17.3% growth since 2018, meaning the public service cloud market has reached $266 billion. Forbes conducted research into the amount of companies that utilise cloud-based service models and found that a staggering 94% utilise cloud services for some of their business’s functionalities.
According to Computing, only 2% of UK businesses have yet to adopt cloud services in their business model. Even SMB’s are seeing the advantage and benefits of adopting cloud service models into their wider business plans with 90% of businesses utilising the services according to IT Biz.
By 2021, it’s forecast that 94% of business workloads will be powered by cloud services, and with the trajectory that this shows, traditional methods could be obsolete in a matter of years according to Cisco.
These statistics show the popularity of cloud services in businesses worldwide and studies from Gartner have shown that cost-cutting is the main attraction for people abandoning their on-premise setups in favour of outsourcing cloud-based methods. Interestingly, another huge factor for those adopting cloud services was for the flexibility and ability to access data, information and systems from anywhere in the world. Which is enabling people to work more remotely and serve more clients around the world. This a massive step for those organisations planning of growing their global brand and accessibility in the years to come.
Those companies that are struggling to release their on-premise model could be risking falling behind the pack and be at risk of losing their competitiveness in their respective industries.
Conclusion
The goal of this guide was to explore on-premise vs cloud IT services. Its widely recognised that cloud services best on-premise models due to the increased dependability, flexibility and cost efficiency. The money you can save on your IT systems can be reinvested into other areas of your business model and allows you to scale down your business capital outgoings and instead increase your aspirations and business growth. The adoption rates shown by companies are a testament to the suitability that cloud services provide for companies and organisations of all structures.
In short, cloud-based services opens your business up to a whole range of capabilities, like remote working and access to information, while saving you money, time and effort on the deployment, training, implementation and ongoing support of physical systems and servers.
Premier IT’s Solutions
With over 30 years’ experience in the industry, serving over 47 countries in over 250 projects, we offer tailored and bespoke IT managed services to businesses of all shapes and sizes. Our sales and technical teams work in complete harmony to understand your business requirements, goals, challenges and growth targets to provide a service completely unique and effective for your business.
We’re committed to providing the best services available, not just for today, but in providing models that ensure your business benefits from the latest developments and the changing landscape of IT managed services.
Our packages and services are designed for start-up companies of only a few employees, to SME’s with over 500 employees. We’re dedicated to providing services attainable by all budgets and companies.
We offer our clients 24/7 support, so you can be safe in the knowledge that we are always on hand to help your business with anything it may require.
You can check out our website to see more information about specific services you may be interested in adopting, with further studies, statistics and information available. This deeper-rooted advice can help you even further to make a decision on the most suitable model for your business requirements.
Get in touch with our team today for more information, advice, prices and to ask any questions you may have about utilising our services for your organisation.