On premise vs cloud

What to choose for your business? Key differences, pros and cons, and a word about hybrids

Entering digitalized world comes with many business changes which might allow you to rise above your competitors. However, one specific dilemma takes the lead in this turmoil of decisions to make. Should I place my IT resources
on-premise or choose Cloud? The differences between these two options in today’s menu.

Old but good on-premise


Classic solution: IT resources are in-house. Servers with their firewall are owned by the company. It was the only option for a long time. On-premise applications are reliable and as secure as your firewall. The company holds full control over the system. Such a solution “consists of database and modules that are combined to particularly serve the unique needs of the large organizations regarding the automation of corporate-wide business system and its function”[1].


For whom?

Choosing on-premise is a safe choice for all businesses that belong to highly regulated industries, especially if security is a key. The software kept on-premise is used through a purchased license or a copy of the software, so an entire instance of a resource resides within an organization. That provides better protection than cloud computing infrastructure.



Nothing is perfect and neither is on-premise. The downside of this environment are costs. Setting the servers and letting them be is not enough. The whole system must be maintained. The expenses of managing such a thing can be exponentially higher than in the SaaS environment. The setup requires server hardware, software licences, integration possibilities, and a whole group of IT employees to support and continuously handle potential issues.

The on-premise environment leads to one more thing: responsibility. If something breaks, the company have full responsibility.


Not so sus SaaS


Cloud computing known also as SaaS (Software As A Service) is an alternative for reliable but high maintenance on-premise. Cloud solutions are already as popular as counterparts thanks to newfound flexibility, time, and cost savings. The main difference between these two options is hosting. While On-Premise everything is in-house, the cloud environment uses a third-party provider host.


The cloud solution allows to cut the cost and pay only on an as-needed basis. Thanks to the flexibility of the environment, businesses can scale expenses up and down depending on usage, used features or company’s growth.



  • Paying only for used resources lowers the costs.
  • Backing up data regularly compensates for the fact that data lies on third-party’s servers.
  • In the case of global expansion, it is easier to access your resources anywhere with minimal effort.



  • In highly regulated industries, especially rich in personal data, emerges a problem of traceability of data and its safety.




Cloud vs Cloud

When choosing a cloud solution you need to pay attention to the differentiation between public and private clouds. The first deliver just cloud infrastructure as a service (IaaS), while the second offers software as a service (SaaS).

Public cloud will be scalable, hold lower capital expenditure and because of being distributed in multiple data centres – will be reliable. However, you have much less control over data security and, while you don’t need to purchase all your own data centre equipment, you will have a higher operational expenditure.

In opposite, private cloud providers will deliver higher security, bigger control and scalability, as well as flexibility – you can place non-sensitive data in the public cloud. Thus, such an option has higher costs (still significantly smaller than it would be on-premise!) and responsibility for maintaining your own data centre, IT hardware, and enterprise software with whole security and compliance.


Hybrid Cloud Solutions


Hard time choosing? There is a way to connect the most desirable features of both systems into one. The number one advantage of the hybrid cloud is agility. You can combine private and public clouds with the on-premise environment to adapt it to your needs. A hybrid solution consists of a variety of IT deployment models, choosing safety and privacy of the on-premise environment next to the infrastructure of public cloud platform from a third-party provider and private cloud either on-premise or hosted outwardly. You can cross the boundaries of just one option and assemble a system suited for your needs.

However, like everything in today’s menu, hybrid solutions have pros… and cons. The system might be hard to implement and then, maintain. Expenses of in-house hardware rise with an on-premise environment but delegating part of processes to the cloud should slightly limit costs. We can not forget about security concerns due to third-party involvement but it ought to be quite easy to deal with through placing sensitive data on-premise and rest in the cloud.


[1] https://en.wikipedia.org/wiki/On-premises_software
Background photo by Pawel Chu on Unsplash

Marta Kościjanczuk



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