Pros and Cons between Cloud and On-Premise Solutions

What is better: on-premises or cloud? Many established companies wonder if it’s worth it to transition out of their on-premises technological infrastructure and move on to the cloud. In contrast, several newer companies wonder if they should invest their early capital in on-premises systems. To choose which option is right for your company, you need to be aware of the differences between on-premises and cloud-based services and infrastructure. There are several elements that go into on-premises and cloud systems. To narrow it down, you should focus on the differences between two core elements to your solution: storage and software. Both storage and software are vital to a company’s ability to function day-to-day. As such, there are several cloud and on-premises offerings for storage and software applications.

1. Cloud Storage vs. On-Premises Storage

Choosing to store your data on external servers or in-house servers is a major decision that companies must consider. As you look at the pros and cons of on-premise and cloud storage, you should be knowledgeable about their most important qualities.


One of the primary ways the cloud interacts with your company is in the way it stores data. Unlike an on-premises servers with storage, cloud storage uses external servers managed by another company. A primary function of any business is the ability to store data in servers. After all, servers are the lifeblood of your organization. They store your information, connect your employees and allow you to connect with others around the world. In the past, on-site servers were the only options available to you, but now, cloud-based servers are a viable option as well. advantage-cloud-storage Cloud storage is a great option for your company because it can:

  • Reduce IT staff’s responsibilities: Being managed by another company, your IT staff doesn’t need to worry about installing new software patches or updates, freeing up their time for other tasks.
  • Eliminate capital expenses: While on-premises storage is considered a capital expense, cloud storage is considered an operational expense. Typically, on-premises storage requires a large initial investment to purchase equipment and install it in the office however cloud storage is maintained externally without the need for capital investment. Instead, companies only need to pay an affordable monthly subscription.
  • Adjust to your budget: To help companies keep their initial costs low, organizations regularly pay for cloud storage on a month-by-month basis. No matter if you’re scaling up or scaling down, most cloud-based storage companies can adjust their prices to meet your budget. Additionally, cloud storage features can be adjusted, added, or left out of plans altogether. This sort of flexibility is great for companies who expect change and don’t want to get locked into paying for services they don’t need.
  • Perform regular data backups: The cloud offers easier data backup than on-premises servers ever could. Cloud-based servers give users peace of mind by allowing business-critical data to be restored in the event of data loss. Companies cannot risk the types of damages and loses that result from failing to secure their data.
  • Adjust to your company’s needs: Cloud-based storage is built to scale. Need a few extra terabytes of data to store more data? Simply upgrade your plan with a click or two. Unlike a company’s servers that would need to have new hardware installed, cloud-based servers can quickly be expanded to meet the needs of your company.


Though there are several benefits to using the cloud for your storage needs, it also comes with some drawbacks. cloud-storage-not-best-option Cloud storage may not be the best choice for your company because:

  • Internet determines user experience: When you use cloud storage, a fast and reliable internet connection is a must-have. A redundant Internet connection should also be considered if a majority of the workload will be hosted in the Cloud. For those who need to work quickly, a slow internet connection can provide a horrible user experience while they access your cloud servers.
  • Costs can balloon with little warning: The rapid scalability of cloud storage, while an advantage listed above, can also be a costly determent if left unmanaged.  Cloud services are consumption models, so the more storage your Company requires, the higher the monthly cost.  Companies should adopt policy and process to avoid the surprise of a costly invoice.  A single point of contact should be identified within the Company, one who is accountable for the Cloud relationship and lap-lanes should be established for consumption with anticipated cost increases when lap-lanes are exceeded.
  • Access is based on connection: A downside of relying on the internet to store your files is that an internet outage can totally knock out your access to important files. Losing access to your data during a connection outage can delay your operations and make it impossible for some staff members to be productive. While the reliability of the internet has come a long way over the years, companies need to be confident in their connection before they switch to cloud storage.
  • Litigation – search warrant: If your company is the focus of an investigation, law enforcement could issue a search warrant to your cloud supplier.  Forcing access to your Company storage without your consent to search for artifacts that support an investigation.  Electronic materials that are strategic to the Company operation, may not be appropriate for Cloud storage.  Companies should have written guidelines and acceptable use policy to accompany the cloud storage service
  • Data is less secure: Whenever you work with a cloud storage company, you are entrusting the management of your data to another party for them to manage and keep secure. Whenever  an outside-party is trusted with your company data, you run the risk of unauthorized personnel accessing it. To avoid this, you’ll want to ask about security practices and procedures of the Cloud company and how they encrypt your data while it’s in transit and at rest.


Unlike cloud storage, on-premises storage relies on infrastructure at your Company’s brick and mortar office to manage your data. You’ll own all of the equipment and you will be responsible for the lifecycle management. As you might guess, there are several pros and cons of on-premises solutions for data storage.


Though cloud-storage has been all the rage lately, some companies still believe that on-premises solutions are best suited for their business needs. For example, many enjoy the greater security that on-premises solutions and storage give their data. On-premises storage is a great option for your business because it can:

  • Operate without internet: One of the major upsides to on-premises storage is that it doesn’t require users to have an internet connection to access data. Though most businesses rely on the internet to conduct business, there’s always a fear that the loss of a connection could harm productivity and make it impossible to access crucial data. On-premises servers will provide you with an internal network that is accessible anytime, no matter your internet connection.
  • Lower monthly internet costs: If your business doesn’t rely on the internet or cloud-based services, you may not need to pay for such a high-speed connection. For those with on-premises storage, the need for a strong connection with fast download speeds is reduced even further. Based on your needs, you may not have to pay for a more expensive internet plan if you don’t have to access the cloud to view files.
  • Provide greater security: Unlike cloud-storage, which is more vulnerable to third parties and prying eyes, on-premises storage is completely restricted from anyone other than authorized personnel. On-premises servers are not accessible to those outside the network, as they are not storing the data online. For companies who handle sensitive data, like those in the financial industry, on-premises storage may be a preferred option.
  • Offer control over server hardware: Some companies enjoy having dedicated servers within their building to handle all their needs. Instead of having to ask a cloud storage company to upgrade their storage plan or add new features, the company can simply do the upgrades themselves. Potentially, being able to modify the server’s hardware can give savvy companies greater flexibility and customization for their storage needs.


on-premise-storage-not-best-option Despite the many advantages that come with on-premises storage, there are some drawbacks companies should be aware of. On-premises storage may not be the best choice for your business because it can:

  • Require extra IT support: If you decide you want to use on-premises storage, you’ll also need to have IT staff to maintain and manage your servers. This could mean you have to hire new staff members or devote more of your current staff’s time to maintaining the servers. This extra support can add to your costs and reduce the efficiency of your IT department as they will have increased responsibilities associated with the on-premises servers.
  • Adherence to industry compliance: If your Company operates within a regulated industry such as Finance or HealthCare, the responsibility to abide by the governing regulations will fall squarely on your Company as you are the owner and operator of the servers and on-premise storage.  Compliance can require the attention of many employees, additional money for outside audits and potential fines if the infrastructure is found to be out of compliance.
  • Increase maintenance costs: Along with the initial capital investment required to purchase servers and other hardware, you’ll also need to continue to buy hardware, software and licenses to upgrade the system or repair it. Oftentimes, a piece of hardware will malfunction and need to be replaced. Additionally, in order to realize the most from your server investment, you will want to upgrade your equipment, which will likely be annually (at least), and will require an investment of more money.
  • Require a greater capital investment: When you first set up on-premises storage, you’ll have to invest a significant amount of capital to purchase the servers and other pieces of hardware to get it running. For companies just trying to get off the ground, this level of capital investment can be a huge disadvantage. Along with purchasing the equipment, you’ll also need to devote time and money to make sure it’s properly installed.
  • Increase the risk of data loss: Data is the backbone of your business. Losing it can be crippling, both for your efficiency and your reputation. With on-premises storage, a malfunction in the system or a compromised system held for ransom can cause you to lose your data permanently. While a cloud-based system will keep your data backed up, on-premises storage systems have all the data stored on an internal server, meaning you assume a greater amount of risk.  A best practice for on-premise storage, to avoid the loss of data, is to include an off site backup service that replicates the data to another site or media.
  • Limit your company’s ability to scale:If your company scales up and needs more storage space or other capabilities, it’s more difficult to scale your on-premises servers quickly. Unlike cloud-storage, where companies can simply pick a more expansive plan with a click, on-premises storage requires you to install new hardware and devote manpower to building the new systems.

When you are comparing your options of on-premise and cloud storage, make sure to weigh the pros and cons of each. As you are selecting your provider for the services, ask the right questions to make sure you get the best option for your organization.

2. Cloud-Based Software vs. On-Premises Software

Is on-premises or cloud better for your business? Whenever a company looks to add new software to their business, it’s important for them to know about whether cloud computing or on-premises software is a better option for their needs.


advantage-cloud-based-software If you’re interested in cloud-based software, you’ll be happy to know that there are plenty of advantages to using it. Some of the top benefits include:

  • Affordability: Generally, costs are lower for cloud-based applications. Instead of having to pay a large licensing fee upfront, you’ll have much lower monthly costs. Often times, these monthly costs take the form of subscription fees. Along with the lower initial costs that make them more affordable, the companies offering these subscriptions often include maintenance and support, saving you manpower and the financial cost of having to troubleshoot problems yourself.
  • Ease of deployment: One of the biggest advantages of cloud computing is its ability to be deployed quickly without long installation processes. Customers of cloud software vendors will be able to start using the vendors’ application within minutes. Quick deployment gives companies an edge over the competition, and as such, is very popular among competitive companies.
  • Management services: One major aspect of cloud computing is the management services that vendors will typically offer clients. Instead of having to host the software or purchase hardware themselves, a customer can work with a vendor who will take care of it all externally, freeing up staff and reducing costs. The business won’t ever have to worry about upgrades or network monitoring, as the vendor will manage it all.


cloud-based-not-best-option As you can see, cloud-based computing has several benefits. However, before you sign up for it, there are a few disadvantages you’ll need to be mindful of, including:

  • Long-term costs: One drawback to cloud-based software is that, in the long-term, subscription costs can end up costing more in total than if a company would have paid for a licensing fee from the very beginning. This is especially true if your organization does not rely on the latest version of the software.  Cloud-based software provides the latest version to the user and those development costs are reflected in the monthly subscription.
  • Less flexibility: Flexibility and customizability is often an issue for companies that use cloud-based software. The suppliers that provide software to companies via the cloud often don’t include widely customizable options. All consumers are provided the same off-the-shelf application.  The service is often designed for the industry rather than the specific needs of a company, meaning that customers may not receive a service that is convenient for everything they do.
  • Security concerns: Like the security issues that affect cloud storage, cloud software also has comparable problems with security. Though security has gotten better, the cloud can still be hacked into by outside forces that look to extract data from these online programs. If you go with the cloud, seek out suppliers who support single sign-on and multi-factor authentication. Onboarding / offboarding processes should be adopted to manage employee access via a common company directory server.


advantage-on-premise-software On-premises software comes with advantages that are sure to provide value to your business. The following are some of the top ways on-premises software can be of assistance:

  • Greater customization: Since you’ll handle all of the on-premises software yourself, you’ll likely be able to customize it much more than if you were subscribing to a cloud-based system. If your company has niche needs that aren’t regularly covered by options in the industry, then on-premises software may be right for you.
  • License purchase versus subscription: licensing models for premise systems are usually tied to the host hardware vs. the employee.  A company has greater discretion for reallocating licenses within this concurrent seat model.  It is usually a best practice to purchase 10-15% more licenses to accommodate growth during the lifecycle of the platform.
  • Greater security: Better security is commonly cited as the main reason businesses stick with on-premises security. Like with storage, it’s less likely that anyone will be able to access your programs and siphon data if you keep everything in-house. Additionally, it’s typically easier to install extra data protection tools to data and programs based on an on-premises system rather than a cloud-based one.


on-premise-software-not-best-option Even with the many advantages on-premises software provides, you’ll also need to take into account the downsides, including:

  • Long deployment times: One major issue affecting companies that use on-premises software is its inability to be deployed quickly. When you purchase a piece of software, you’ll have to configure the hardware, test the program to see if it’s working, and then roll it out to every employee. This can be incredibly time-consuming and can put you at a disadvantage.
  • Scalability: Another common issue with on-premises software is that it doesn’t scale as well as cloud-based software. For example, if you increase the number of users in a program, your IT staff will have to manually install the software or hardware to let your new employees use it. Additionally, old software can go out of date and saddle you with programs that you no longer have any use for.
  • Remote offices and mobile workforce: If your company has multiple offices or a large mobile workforce, on-premise software can introduce new challenges in providing access to these remote employees.  Additional network or carrier services must be included, increasing the operational costs and overall complexity for the Company.
  • Upfront costs: When you decide to purchase software and integrate it into your on-premises system, you’ll need to pay a higher initial cost for the services. While these costs may even out over time, it’s likely that new, updated programs will hit the market, meaning you may not use a program long enough to make back the money you spent at the beginning. For companies that don’t have a lot of capital on hand, a cloud-based subscription may be better.


3. Do You Have to Choose One or the Other?

One major trend in a variety of industries is the use of hybrid systems that utilize both cloud and on- premises solutions. This means you don’t have to be exclusive with your usage of on-premises or cloud-based systems. Instead, you can use both for the most appropriate needs. For example, you might have some in-house servers for the most important data, while having day-to-day data in a cloud so all your employees can access it quickly.

Find the Right Solution With Network doctor

Whether you want on-premises, cloud or hybrid solutions, you can trust Network Doctor to provide them. As one of the top business technology companies in NY and NJ area, we know that reliable technology is crucial for businesses to succeed. Choosing Network Doctor for your on-premises or cloud-based needs means you’ll be working for an organization that has over 20 years of experience in guarding sensitive data, making companies more efficient and providing top quality customer service. If you’re looking to add more cloud-based services to your business, we have a variety of cloud solutions available to consumers, along with on-premises ones as well. If you’re unsure of what you need, contact one of our representatives to receive expert advice on how we can help.

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