On-Premise vs. Cloud: Key Differences, Benefits, and Risks

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Netooze
September 4, 2022
On-Premise vs. Cloud: Key Differences, Benefits, and Risks

One notices several crucial distinctions when comparing an on-premises setup with a cloud one. Whether or not a cloud infrastructure is the best option for a business depends on several criteria in today's enterprise IT landscape. However, many companies cannot transition to cloud computing and continue to rely on legacy and on-premise software and services.

On-Premises vs. Cloud

It's no surprise that cloud computing has become so popular; it offers several advantages for businesses, including greater agility and scalability, lowers IT costs, and a reduced need for costly infrastructure upgrades. However, on-premise software, which runs locally on a company's servers and is protected by the company's firewall, may continue to meet your organization's requirements just fine (after all, "if it ain't broke, don't fix it"). In addition, the reliability, security, and control organizations can exercise over on-premise systems are advantages that the cloud lacks. IT decision-makers agree that they must utilize new cloud and SaaS apps in addition to on-premise and legacy systems to realize their organizations' objectives.

Local Server Applications

The safety of sensitive company information will remain a top priority whether the company chooses to host its apps in the cloud or on-premises. However, enterprises operating in highly regulated sectors may decide whether to host their apps on-premise already decided for them. And you may feel more secure knowing that your data is housed within your servers and IT infrastructure.

Businesses can't just use any piece of on-premise software; they have to buy a license or a copy of it. Overall security is typically higher on-premises than in the cloud because the program is licensed, and the entire software instance is stored locally. 

Why would a business requiring this level of safety takes the metaphorical plunge into cloud computing?

On-premises setups have the potential for far higher expenses than cloud computing environments due to the administration and upkeep of the entire solution. Servers, software, integration tools, and knowledgeable IT staff to troubleshoot and handle difficulties are all necessities for an on-premises deployment. Not included here is the time and money spent fixing things that break or stop working at the company.

Hosted Services

One key distinction between cloud computing and locally installed software. In an on-premises setup, the business does all the hosting, while a third-party service provider does everything in the cloud. Companies can successfully scale up or down based on overall consumption, user requirements, and corporate growth thanks to this pay-as-you-go pricing model.

A cloud server is a remote computer that a corporation uses to house its software. Organizations merely pay for the resources they use, there are no upfront costs, and regular data backups are possible. The cloud especially appeals to firms with worldwide expansion plans because it facilitates effortless communication with clients, suppliers, and competitors worldwide.

The practically immediate provisioning time enabled by cloud computing is a further benefit of this setup. Once a business subscribes, it can immediately begin using any new software integrated into its system. With rapid provisioning, users don't have to wait around for the application to be installed and set up before they can start using it.

For one concrete example, electronic data interchange (EDI) software has historically been housed on-premises, but recent advances in cloud computing have enabled EDI providers to offer their services via an EDI SaaS model.

This change has reduced customer software installation costs while allowing software developers to establish a sustainable annual recurring income model.

Distinctive Features of Both On-Premise and Cloud

As was discussed, there are some critical distinctions between an on-premises and cloud setup. The needs of your business and the nature of the problem you're trying to solve will determine the best course of action.

Deployment

  • Within an organization's own data center, or "on premises," all necessary hardware and software are installed and maintained by the business itself. The organization must take care of the solution and its associated processes.
  • While there are various types of cloud computing (including public cloud, private cloud, and hybrid cloud), in a public cloud computing environment, resources are housed on the premises of the service provider, but businesses have unlimited access to and use of those resources.

Cost

  • Businesses that prefer to keep their software installations on-site must shoulder the ongoing expenses of the servers' hardware, electricity use, and physical footprint.
  • Cloud: Businesses who use a cloud computing model incur no capital expenditures or ongoing operating expenses; instead, they pay as much or as little as they utilize to access the cloud's pool of computer resources.

Control

  • In-House: In an on-premises setting, businesses have complete ownership of their data and can decide how it is used. For this reason, some companies, particularly those operating in highly regulated sectors or with heightened privacy concerns, may be slower than others to transition to cloud computing.
  • Many businesses and providers have struggled to answer the question of who owns data in the cloud. If your third-party provider has an unexpected outage, you may be unable to access their data and encryption keys.

Security

  • On-Premises: Organizations with particularly delicate data, such as those in the public and financial sectors, require the additional security and privacy afforded by an on-premises setting. While the cloud has great promise, many companies still worry about keeping sensitive data safe, making an on-premises system preferable despite its costs and downsides.
  • In the cloud, security is still the critical concern preventing cloud services' widespread use. Many publicized cloud breaches have occurred, and IT departments worldwide are alarmed. Employee data, like passwords, could be compromised, and intellectual property could be lost.

Compliance

  • On-Site Compliance: Regardless of their industry, most businesses nowadays must adhere to various regulations. The Health Insurance Portability and Accountability Act (HIPAA) protects the privacy of individuals' health information, but it is just one of several such laws. For example, the Family Educational Rights and Privacy Act (FERPA) protects the privacy of student's educational records. Companies that comply with such rules must always be aware of the status of their data and take all necessary steps to protect it.
  • Cloud: Businesses who choose this computing model need to research to ensure their chosen cloud service provider is in line with all applicable industry regulations. Protecting sensitive information and respecting the privacy of customers, partners, and employees is imperative.

Solutions for the Hybrid Cloud

While many companies are discussing the pros and disadvantages of cloud computing versus an on-premises environment argument within their offices right now, another option provides the advantages of both.

IT deployment patterns include on-premises, private cloud, and public cloud; solutions that combine these types are called hybrid cloud solutions. Hybrid cloud infrastructure requires a public cloud platform from a reliable third-party supplier, a private cloud that can be built locally or remotely, and reliable wide-area network (WAN) connectivity between the two.

Cloud for Cleo Integration

Adding a SaaS product to meet a specific business requirement, migrating data and processes to a cloud integration platform, or operating as a SaaS company that relies on providing lightning-fast reactions to customer demands require seamless integration.

Scalability in support of any-to-any hybrid integration, data transformation, rapid and secure file transfer, and end-to-end visibility of all data flowing across their dynamic ecosystems are necessities for every successful business. Accelerating ground-to-cloud and cloud-to-cloud integration with Cleo Integration Cloud allows companies to link all their data, whether on-premises or in the cloud, and quickly integrate apps, storage, and business platforms.

All B2B, application, cloud integration, and data lake ingestion processes may be built, controlled, and monitored using Cleo Integration Cloud's self-service and managed services for both business and technical users.

Please get in touch with Cleo immediately if you want to learn more about how you may connect your business's essential on-premise and cloud apps.

Netooze® is a cloud platform, offering services from data centers globally. When developers can use the straightforward, economical cloud that they love, businesses expand more quickly. With predictable pricing, thorough documentation, and scalability to support business growth at any stage, Netooze® has the cloud computing services you need. Startups, enterprises, and government agencies can use Netooze® to lower costs, become more agile, and innovate faster.

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