On-Premise vs Cloud Computing: How to Choose the Best Solution

Updated Sep 14, 2021 • 8 min read

Cloud computing is already a widely adopted technology, but some business consider moving away from its well tested, on-premise system.

When thinking about on-premise vs cloud based technology, there are a variety of factors to consider and both options have their pros and cons that will be discussed later in this article. However, we first need to understand exactly what cloud computing is and what an on-premise environment is.

What is cloud computing?

As defined in our previous article, cloud computing is defined as a service providing computer resources on-demand via a pay-as-you-go model (PAYG). These resources include virtual machines, serverless infrastructure, data storage, databases and more.

What is an on-premise environment?

An on-premise environment is a place in your own data centre where you can deploy your applications to. This means an on-premise environment must consist of five major things:

1. An on-premise environment must include your own server hardware. This is used to run the software and allows the digital aspect of your business to function.

2. You will have to run your own network that can only be accessed by business employees. This includes security features such as firewalls as well as switches and routers.

3. Air conditioning systems are vital to keep your hardware working optimally. Insufficient air conditioning can cause hardware damage or, in extreme cases, a fire hazard.

4. Your hardware must be supplied with a constant power supply in order for it to function. This power must also be supplied redundantly, allowing for your operations to continue functioning if one of the power supplies goes down

5. Finally, a single place to store all the features above is also required for the successful running of an on-premises environment.

One of the key differences between on-premises vs cloud computing is that cloud computing does not require any hardware to be installed on-premises. This removes the need for the costly setup and maintenance of a server room and the space required to store such hardware.

The advantages and disadvantages of on-premises vs cloud computing

In cloud computing, the advantages tend to largely outweigh the disadvantages for most companies.

Advantages of the cloud

Minimal upfront costs: As mentioned earlier, cloud computing does not require any upfront cost in terms of setting up hardware or building data centres. Your company only pays for the resources it needs to use from your cloud provider.
High availability: Large cloud providers have massive and complex infrastructures across the world. This means that their cloud services are ubiquitously available, and companies can provide easily scalable services.
Minimal client management: Because cloud services require minimal infrastructure on the client end, developers can focus on the creation and improvement of current services rather than maintenance. Because developers can focus on creation and improvement, this also leads to a faster time to market for new resources.
Scaling based on demand: Because the client is not responsible for the hardware, cloud services enable businesses to scale their operations on demand. This means your business will always be ready to scale up for higher traffic, or even scale down operations that have become redundant. This also allows you to optimise costs and only pay for the services you’re using.
Collaboration: Cloud services allow for anyone with the right privileges to access your network. This allows your team to work remotely from all over the globe, ensuring your employees can securely exchange company data.

Disadvantages of the cloud

a. Security: Although cloud services come with built in security, the ability for anyone to theoretically access your cloud means that your data can be slightly less secure. However, some cloud services such as AWS or Google are HIPPA compliant. This means they are so secure you can even store medical data.

b. Initial cost: Although there are no set up costs, there are some initial costs when it comes to cloud migration and training your developers. Migrating your data to the cloud is a process in of itself, and the cost of this should be considered alongside the cost of training your developers to work with cloud technology.

Advantages of on-premise

Hardware ownership: Owning your own hardware may mean that you have a greater flexibility in certain cases where you want to do something unorthodox.
On-premise computation: At some point during the expansion process, hardware is going to become more expensive and you may still be doing a lot of computing on GPUs. In scenarios like this, it may be easier to continue doing GPU computation on premises and shift everything else to the cloud, creating a hybrid structure.
Security: Because the cloud is shared with other users, security is slightly less tight than having a closed, on-premises network. However, sole-tenant nodes are beginning to provide a solution to this pitfall for cloud customers.

Disadvantages of on-premise

a. Hardware maintenance: On-premise environments require that you keep and maintain hardware. This includes elements such as HDDs, air conditioning systems and a power supply. You may need a dedicated team to manage this.

b. Cooling: As mentioned earlier, hardware can get hot. This requires a cooling system to be set up and maintained to prevent the hardware from overheating, as this can cause a fire hazard in extreme cases.

c. Scalability: There is no way to scale quickly on demand. So, for example, if you experience a sudden large increase in traffic, you won’t have enough capacity for all your customers.

What should you consider when choosing between cloud vs on-premise?

Making the final decision between cloud and on-premise can be tricky, but there are a few factors to consider when making a final choice.

If you already have a ‘not so old’ infrastructure in place, you might consider how much cheaper the cloud will really be. When taking costs into account such as cloud migration and developer training, these have to be weighed against the maintenance of your current infrastructure and how much scalability you think you’ll need.

Although not relevant to most companies, the fragility of your data also has to be taken into account. This is because cloud servers can be accessed in theory by many people outside of your organisation. However, your data would have to be government-level fragile for this to be of any consequence.

Long-term computation can be expensive. This is especially true if you are currently using GPUs for long-term computation. Getting a quote from your provider on the pricing for this is essential to weigh up the costs.

When should you choose cloud infrastructure?

Start-ups are prime places to start working with the cloud. The plug-and-play ability of the cloud means that new companies don’t have to bother setting up extensive hardware to support their own services.

Any company that expects to be experiencing a large surge in traffic should immediately start thinking about switching to the cloud, or at least incorporating some cloud services.

This quickly prevents your infrastructure from being overwhelmed and avoids the cost of having to expand your hardware. If you don’t end up with the amount of traffic you were expecting, you may have wasted money by investing in the expansion of your on-premises hardware.

When should you choose on-premise infrastructure?

It’s difficult to justify choosing on-premise infrastructure unless you have a deliberate reason to. If you’re still unsure which one to choose, it’s likely that cloud services are your best chance.

Contacting a company that specialises in cloud migration solutions may be the best way to visualize all the steps needed to start using the cloud, and can help you come to a decision.