Cloud versus on-premise has been a topic of discussion for a while now, even prior to the massive impact of COVID-19 on the workforce. With the shift to a remote or hybrid workplace the benefits of cloud solutions are being even more sharply realized. 2021 toppled how companies approached their workplace with just 24% of employees working onsite. (prnewswire) Under these conditions, cloud solutions shine even brighter. And if industry projections are any indication, it may become a staple part of the business strategy going forward.
The results of primary market research performed by AT&T and Dubber Corporation Limited suggests hybrid work – a mixture of onsite and remote work – will become the standard operating model across industries by 2024. According to the survey results, hybrid work will become the default by 2024, with half of work performed offsite: 81% believe hybrid work will be the foremost working model by 2024, with 56% of work done offsite.
This suggests that the need to prepare for a hybrid work environment will be a key element for many businesses moving forward. If history is any indication, those who adapt and pivot early will have a jump on their competition, especially in customer service and employee acquisition and retention. Even with this information, it may still leave the question for some business owners as to whether a cloud solution is preferable to something on-premise for their specific business’s needs. It is through this lens that we compare the two options and offer our thoughts.
What’s the Difference?
In their definition, the difference comes down to where your solution lives. On-premise (or on-prem as some like to shorten it) resides on your own computers and servers usually located at the business site. A cloud solution is kept on a remote server and you typically access it from a web browser. Each of these has benefits and drawbacks we’ll take a look at.
Cloud solution benefits
In general, the benefits are easy access, flexibility and a much smaller impact to your bottom line in the short term.
- Affordability – With cloud, there are typically very little upfront costs for housing your solution. Instead, you make monthly payments for hosting and maintenance which can be classified as an operating expense.
- Cost Planning – The monthly costs are typically a regular, known quantity that is easier to plan for. Depending on your situation, you may be able to pass these along to your customers as part of your own fees.
- Scalability – Cloud solutions offer much more flexibility because you only pay for what you need at the moment. This allows you to quickly scale in response to changes in your business.
- Simplified IT – Since you aren’t hosting the solution on your own equipment, you don’t have to invest heavily into the IT support for it. Much of the updates, service and maintenance will be handled by the service provider.
- Responsiveness – When a solution is cloud-based, any updates or fixes can be deployed very quickly online. One update and everyone accessing the solution immediately benefits from the fix and experiences the same version.
- Security concerns – On average, your data is safer than on a server in your office. This is because hosting services typically have security measures far better than most businesses care to budget for. Since these data centers service many clients, you become the beneficiary of those multitudes as you don’t have to shoulder the burden of the security cost alone.
Cloud solution drawbacks
With all its attractive benefits, a cloud solution does have drawbacks that should be considered.
- Ongoing costs – Cloud applications can become costly over the very long term as the overall total cost of ownership increases each month. Though this also depends on your specific return on investment calculations.
- Connectivity – Any cloud solution does require that you maintain reliable online access. No internet, no access to the solution.
On-premise benefits
As with most comparisons, the drawbacks of one solution are typically the benefits of the other. Generally speaking, the benefits provide control, and predictability albeit at a larger upfront investment.
- Total cost of ownership – Because you generally only pay for your licenses once, an on-premise solution can have a lower total cost of ownership. This depends largely on the expected life of the solution and its return on investment, so your mileage may vary.
- Uptime – You are not bound to internet connectivity to access your software. However this one is fading fast when you consider the emerging trend towards the hybrid work environment.
- Ultimate system control – Everything is yours. The data, the hardware and the software are onsite and in your hands. You are directly in charge of access, maintenance and updates.
On-premise drawbacks
- Large upfront costs – On-premise systems typically require a large initial outlay of cash for servers, installations and other hardware to get going. You’re also going to want to make sure you have the necessary budget for IT support staff or services.
- Maintenance – With power comes responsibility, and this is no exception. You are solely responsible for all of your maintenance, storage, backups and recovery strategy.
- Less responsive – On-premise solutions would need each device or server individually installed and updated in person. This can make the initial start-up take longer as well as any system-wide updates in the future.
In our experience, we find that cloud solutions are more appealing for many businesses. Most business owners don’t want the upfront expenditures in hardware or staff to support on-premise solutions, especially where the anticipated lifespan may not provide for a positive return on such an investment. Additionally, with many businesses needing to become more agile to meet today’s challenges, the cloud has become an increasingly popular solution due to its flexibility. This is only further bolstered by projections suggesting a hybrid workforce is here to stay and will only become more common. Once remote access becomes a norm for a business, the cloud solution benefits far outpace on-premise in most scenarios.
If you want to discuss your specific needs and challenges, please reach out to us at Dorian Solutions. We enjoy working with our partners as consultants, strategists and software developers to look at the big picture and forge a process to help you conquer your unique challenges and lead you to success. Our goal is always to get you back to growing your business, and not just running it.
