Introduction
During the last years, there have been a lot of discussions about the dichotomy of on-premises versus cloud infrastructures. For the last months, I have gone along with several different environments through a close seen of the main European companies.
This article intends to expose both types of infrastructure by identifying the key points of each of them. In the end, I would suggest some tips and relevant information to better know your path, according to your business model and way of action.
What is on-premises?
Before cloud computing was available, companies had to store all their data on their in-house equipment, which they had to manage and maintain, allowing the IT teams to keep control of the system, its updates, and its security.
However, if a business suddenly needed more capacity to store the volume of data due to, for example, an entry of a set of new employees or an unanticipated increase in orders, it would be necessary to buy and install new hardware, software, and networking infrastructure.
What is Cloud?
Cloud services are technological infrastructures in which storage, apps, and software through the internet and servers are in an offsite data center.
It is delivered on-demand as a service, typically on a pay-per-use basis, which is one of the advantages of the cloud. You pay for what you consume, typically monthly, without the need to worry about capacity management, hardware refreshes, or other maintenance and management tasks.
What are the differences, in terms of…?
Security
By developing an on-premises environment, you can ensure that your sensitive data is stored in-house and can only be accessed internally. This means that you have full control and responsibility for your backup system. Public and non-public entities that have strict security policies, such as military, aerospace, and similar industries, choose private cloud or on-premises solutions to avoid even the minimal risk of a data breach.
In the cloud environment, the information is accessible via the web, and not through specific hardware or software. Hence, this means that the control is made by a cloud provider. However, this third party is responsible to implement the security features such as data monitoring, a high level of encryption, and logging to battle data breaches. This subject has been a priority in the last years to ensure the security and data protection of cloud systems.
Scalability
The decision between on-premises or cloud in a company environment should be related to the present and future expectations of the business.
If a company works in an on-premises environment, and if in a certain period wants to grow its business by scaling for other locations or products and it’s necessary to expand or to update any system it will surely require hardware installations. On the other hand, if the company does not have any needs to grow internally or even through different markets in the short term, it can’t be a requirement to move to the cloud.
If a company is cloud-based it is the opposite. There is no need for external investment in the new hardware systems, and it is easier to scale without moving any tool that the company has implemented.
As things are becoming internationalized and remote-based, which increases the volume of cross data, in my perspective, the better option to scale a business in these terms is to invest in cloud-based systems. I believe that companies should not just think about their specific needs but also about stakeholders’ environment.
Costs
In on-premises applications, the installation is done on internal servers of the company, and therefore there is a hardware-hosting cost, licensing costs, and necessary space cost. Some maintenance and monitoring of the equipment are required, such as specialised and trained people to make all these updates. An appropriate cooling system so the hardware doesn’t overheat and backups for situations when the electricity goes down, cannot be forgotten.
Usually, on the cloud, it is only required a strong internet connection, and the subscription fee varies depending on the time used and, of course, the type of contract with the cloud provider. The maintenance and updates are responsibility of the cloud provider automatically so isn´t a cost accretion.
Please have a look at the next image which helps to interpret the main differences between both, on-premises, and cloud environments.
To calculate these possible costs, you can easily make a cost-saving test that will allow you to compare all the past, present, and future costs of this migration process. It calls TCO (Total Cost of Ownership), and it’s free.
Still, I would like to recommend being informed with specialised professionals such as consultancy companies specializing in the cloud. For more information talk with BiLD Analytics.
An overview of the current market
What is the world trend?
The increasing amounts of companies’ data have been one of the biggest concerns for several businesses. I believe that soon, the success of companies will be dependent on the way they manage their data. It’s vital to collect and process it regularly as well as to be able to access it in real-time from anywhere to ensure business growth. Also, instead of having numerous spreadsheets and databases, it’s much more efficient to place data in a single location where you can easily view it all wherever and whenever you want to.
For those reasons, companies are migrating to the cloud, so they don’t need to worry about the physical upkeep of their private datacenters storing information.
Advantages of adopting this trend (Cloud)
According to the growth of volumes of data, the traditional storage infrastructure models lack the agility to meet rapidly changing capacity demands. Nevertheless, cloud computing gives enterprises the option of storing large amounts of data on servers they do not have to physically manage themselves.
To highlight the main advantages:
- Keep updated
- Access to the data from anywhere any time
- Easy to maintain
- High scalability
- Cheap in a medium/long-term perspective
Drawbacks of this approach
Despite this valuable information, I want to highlight the major vulnerabilities of the cloud which are the security and the dependence on the internet connection.
Since cloud computing is a model completely dependent on the internet, it is also exposed to related dangers. Failures of servers or networks are as well possible as the system can be hacked by people. Due to these inherent risks, it is essential to have security measures available.
Therefore, data protection law is not just a way to prevent these perils, but also it is a requirement. Non-compliance with data regulations and a subsequent breach can lead to monetary losses and damage to brand authority.
But, how to achieve data protection in the cloud? You can implement various techniques, such as encryption, access control, endpoint security, and monitoring. According to your company’s location, data may be subject to data protection regulations like the EU General Data Protection Regulation (GDPR), The California Consumer Privacy Act (CCPA), or the USA Health Insurance Portability and Accountability Act (HIPAA).
Make sure your company meets these requirements, and then you are mind free to choose between on-premises or cloud systems. As you can see, the possible drawbacks of a cloud environment can be mitigated and switched into a positive result for the company once it is prevented from data leaks.
Should I do the same?
After all this explanation, you may ask, so what should I choose for my company?
If you are planning a global expansion, I believe moving to the cloud is the better option once it allows you to grow faster with lower spending.
However, it may make sense to keep an on-premises strategy or even redefine your business model if the amounts of data, the business forecast expansion, and the future expectations are lower.
Since the positive impact of the migration is more considerable rather than the possible risks of this approach, I believe there is no doubt that the cloud system would be the better option to hold all business data. Let’s have a look at a specific real case.
The Netflix’ case
Netflix is an interesting case study, a true example of success. They started to move to the cloud when they faced a problem, in 2008. At this stage, Netflix was running relational databases in its datacenters when happened a failure. A datacenter crash shut the entire service down and stopped DVD shipments for three days. The company faced a choice: turn Netflix into a world-class datacenter operations company or move the service to the public cloud. The owners choose the second option.
Since then, till 2015, the number of hours of content streamed on Netflix increased one thousand times, and the company had eight times as many people signed up to the service at the end of its cloud migration process as it did at the start of the process. Cloud infrastructure was able to stretch to meet this expanding demand while traditional servers in a datacenter were not able to.
Ruslan Meshenberg, the Director of Cloud Platform Engineering in 2011, said “The thing that worked for you at a smaller scale may no longer work at the bigger scale”. Thereby, what I would like to ask is: What if Netflix hasn’t migrated to the cloud at that time? How would they be now? We will never know, but we can reflect on it.
Final tips
Before you jump head-first into the cloud, there are a few things to consider along the way. Allow me to show you some tips:
1- You should consider all the nitty-gritty details of where you are, where you want to be, and how you are planning to go there. Make sure you get advice from the right people.
2- In case you are extremely in doubt to move to the cloud, you also could try a hybrid system where the company continues using its existing on-premises environment for corporate functions like human resources and finances, but adds some resources offloaded to a third party, for example, to provide remote work opportunities or support some business units or regions. This approach helps to bring down costs and facilitate more efficient work.
3- When choosing to migrate to the cloud, you must ensure that you align a medium/long-term strategy according to the vision of the business. For example, there are a lot of cloud providers, and to determine which one is the right for you, we’d recommend teaming up with a cloud partner who can take an in-depth look at your conditions and may recommend a solution that will best fit your needs. A vision from the outside is always better once it brings veracity and a clear vision without being focused on what happened in the past.
To sum up…
In case after reading all the pros, cons, and comparisons you’re still hesitant as to choose between the cloud or on-premises environment you need, feel free to reach me and let’s have conversation about it.
Partnering with an organization that understands cloud adoption can greatly reduce the risks of risks of taking one step forward and then taking two steps back.
It remains for me to thank the readers. I hope you find this article interesting and useful for you. What topics do you want to know about more? Do you know that the market share of cloud providers is dominated by two huge companies? Do you know that both joined, AWS and Microsoft Azure have about half of the entire market share of the world cloud providers?
If you want to know more about this or other topics related to the cloud do not hesitate in reaching out to us.
Thanks for your read,
