Many organizations are considering shifting their enterprise IT to cloud solutions in order to reap its many benefits. They have to consider several factors and take into account all the risks and advantages of the cloud and see how it stacks up against the traditional on-premise solution. In this blog, we will compare the differences, risks, and benefits of on-premise versus cloud solutions.


An enterprise on-premise solution, as the name indicates, is software installed and run on computers on the premises of the organization, and not elsewhere remotely, such as a server farm or cloud.

1. Cost

On-premise servers are costly and often require more than a one-time purchase. Keeping your data accessible and secure requires hardware that is not only up to date to handle all relevant requests but also compatible with other server systems and updated software systems. An on-premises server is not just a sunk cost—it is a recurring cost every time you need to update your hardware.

Add in the ancillary hardware required to support an on-premise server—including cooling fans, processors, and new wiring—and the costs of supporting hardware needed to maintain a physical, on-premise server can add up quickly.

A physical or on-premises server also requires a dedicated tech team to support all the updates needed to keep these servers functional. A dedicated tech team with service on both the hardware and software sides is the only way to ensure your on-premises server experiences as much uptime as possible.

2. Security

Data security is in your hands, and it is much more of a manual process. On the other hand, you also have more control over how to secure your data. For some companies, this is a serious positive, while others might not have the expertise to secure their network.

A poorly built or poorly managed server system leaves the entire system vulnerable to attack. This is especially important for highly regulated sectors like healthcare, education, and finance. For leaders in these industries, it is critical that they research and understand the security protocol of the cloud service provider they go with. Cloud providers are serving this need by beginning to offer services that are in line with regulations like the Health Insurance Portability and Accountability Act (HIPAA), the Family Education Rights and Privacy Act (FERPA), and the Payment Card Industry Data Security Standard (PCI DSS).

3. Scalability

For starters, on-premises servers are scalable—but they come at a cost. Being bound to physical hardware means that as your organization’s computing and data storage needs expand, so does your need for well-functioning hardware.

Scaling with on-premises servers means purchasing new servers, and potentially purchasing new property on which to host the servers. This does not even include the support hardware needed to keep it operational: voltage management systems, HVAC systems, internet pipeline and cabling, and more. Furthermore, you may have times in the day where the servers are barely used, or are idle, yet they are consuming electricity and taking up space in terms of rent.

4. Reliability

On-prem servers seem reliable on the surface, but unless the firm has invested in geographic redundancy, a network outage can shut down the entire business.

Cloud-Based Solutions

Cloud solutions are completely managed by a third-party vendor such as Google or Microsoft that owns and operates the server in their own datacenter.

1. Cost

Cloud-based servers automatically update on the backend. With a vendor responsible for system updates, your computing compatibility is handled and guaranteed by a third party and built into whatever subscription model you have with your cloud vendor. This can reduce your operating costs significantly, both in the monetary and time investments required to get your system up to speed.

Moreover, predicting costs is easy with the cloud—rather than run the risk of overspending or underspending on hardware and infrastructure for your organization’s needs, cloud storage is as simple as choosing how much storage your company needs.

2. Security

Cloud solutions are reliant on third-party security measures. The data backup process is automated, making it quicker and easier. Data stored in the cloud is hosted on servers that can be located anywhere on earth and, therefore, makes a physical data breach much less likely.

Cloud servers have the advantage of anonymity: because they host many organizations, and embrace many different points of entry, they are not tied to the physical location or servers of any single organization. These numerous points of entry actually make it more difficult for data and systems to be compromised and increase public cloud security.

Cloud providers also invest heavily in security protection to alleviate fears—top cloud vendors offer protection measures including armed guards, fences, facial recognition and other biometric security devices and surveillance cameras to prevent any cloud storage security issues.

3. Scalability

The scalability of a cloud-based server is the key reason to move to the cloud: Whenever extra processing power and data storage is needed, it is as simple as adjusting a subscription with a cloud service vendor: no hardware and no scaling perimeters. And if you have variable workloads, you only pay when your servers are used, and you pay nothing when they are ide.

4. Reliability

In most cases, cloud vendors have several layers of redundancy that help them recover from outages quickly. But all said and done, there is always the risk that something beyond the firm’s control can disrupt business.

As organizations consider whether to invest in the cloud or stay on-premise, there is a third alternative. Many companies are now considering the use of hybrid systems that utilize both cloud and on-premises solutions. This means they do not have to be exclusive with their usage of on-premises or cloud-based systems and can use both as required.