On-Premise vs. Cloud Hosting – Which Do You Need?

Deciding whether to move to the cloud can be difficult, especially when there’s so much mixed information on the matter. This is unsurprising as there’s no “one size fits all” answer – it depends largely on your organization’s needs.

While the cloud is becoming a “go-to” for small to medium-sized businesses (SMBs), it isn’t necessarily for everyone. To make informed decisions, business leaders need to understand the differences between on-premises versus cloud and where these considerations fit in the organization’s overall I.T. strategy and business goals.

Types of data storage

There are two main types of data storage hosting available to businesses nowadays: on-premise hosting and cloud hosting.

On-premise hosting (sometimes referred to as “on-prem”) describes when a company’s server is hosted on physical, on-site infrastructure that the organization owns, manages, and maintains. All of the server hardware, firewalls, and operating systems are kept in-house – usually at the company’s physical office. Formerly, these setups were the only viable hosting solution for companies, but in the last decade, another option has emerged.

Cloud-based hosting describes when a virtual organization (or cloud infrastructure) hosts the servers, storage, databases, and software off-site, delivering them “as-a-service” to customers via cloud computing. Because the data is hosted off company premises, you can think of this as the opposite of hosting your data on-premise in nearly every aspect.

In general, the use of cloud servers is increasing steadily, but this may not be the best option for your business. So, how do you narrow down the best fit for your company? To decide, you’ll need to compare each option’s cost, security, scalability, and data accessibility and reliability.


Overall costs must be evaluated in two categories: hardware and maintenance. Your hardware cost generally entails the upfront cost for the physical devices that your organization will use to run your technology. On the other hand, maintenance costs describe the expenses required to maintain and manage that hardware over time.


As expected, with on-prem hosting, organizations must pay upfront for all their hosting hardware. Although that bill might already be hefty, you must also consider replacement costs and the implications of that hardware failing earlier than expected or becoming compromised. Similarly, because an on-premise hosted organization owns and controls its own hardware, it also pays maintenance costs. Some typical maintenance costs include:

  • I.T. staff to reduce downtime
  • I.T. staff to secure all hardware, software, and firmware configurations
  • Security staff to monitor risks
  • Resources spent performing security updates
  • Resources wasted responding to service interruptions and issues


Alternatively, you’ll have virtually zero upfront hardware cost with cloud-based hosting because cloud hosting requires no physical on-site hardware. In this case, your organization would take advantage of the benefits of all the hardware you’d need, while the cloud provider takes care of all the actual hardware. Although you don’t have that hefty upfront cost like you would with on-premise hosting because the cloud provider pays for the hardware, software, and firmware upkeep, they pass that cost on as part of your subscription.

While the cloud provider handles all the hardware and maintenance, you’ll still need to consider the costs associated with:

  • Meeting shared responsibility security requirements
  • Hiring staff with specific cloud environment expertise
  • Leveraging added security to monitor, identify, and manage cloud vulnerabilities and threats


Security is an essential requirement for any organization, especially regarding financial aspects and sensitive customer and employee details. Because the cloud is still relatively new, it’s no surprise that 73% of companies have cloud-based security concerns – but are these concerns valid?


When hosted on-premise, security tools (like firewalls) are usually not interconnected by application programming interfaces (APIs). In this case, typical resources are static and overall security is driven by an in-house I.T. team with on-prem settings. Although on-premise data storage is wholly restricted from anyone other than authorized employees, many extra measures still need to be taken to maintain data security.


With the cloud, security tools are all interconnected and use APIs, so they can all be automated to scale in tandem with your resources. However, the public cloud provides more opportunities for prying eyes on your data. Because of these innate security concerns, cloud providers are more likely to have multiple disaster and redundancy protocols for added layers of data security.


Do you need to frequently scale your data storage to meet variable customer demand? Do you worry about slowing down your operations because your equipment can’t keep up? If you do, this factor may be a critical consideration for your organization.


With a lack of interconnected APIs, on-premise hosting solutions are typically not as scalable as cloud services, so you would need to upgrade your equipment to meet fluctuating customer demand. While this may be a dealbreaker for some organizations, it may not be an issue if you have a steady sense of your demand requirements.


As you’d expect, cloud-based hosting allows your business to scale as needed to meet demand without waiting for the delivery of new hardware. Your customers won’t have any obstacles or delays because the data is available when they need it, regardless of traffic on your servers.

Accessibility and Reliability

Do you have hybrid or remote employees? Are you concerned about productivity and data accessibility in the event of an internet interruption? For most organizations, accessibility to data and reliability of that data are significant factors in hosting considerations.


Because servers are kept at a physical location, employees can only access data and virtual desktops while in the office. If you have an “on-site only” work policy without any hybrid or remote workers, this may be fine!

On-premise hosting is also not reliant on an internet connection. Today, it’s not uncommon to rely on the internet to conduct business; however, there’s always a fear that the loss of a connection could decrease productivity or make it impossible to access crucial data. Fortunately, on-premise servers will provide you with an internal network that is accessible anytime, regardless of your internet connection.


With cloud-based hosting, you have the convenience of accessing your applications anytime and anywhere from any device with an internet connection. Hybrid and remote workers can rest easy knowing they can access the data they need from any web browser.

Unfortunately, in the event of an internet interruption, this data will become unavailable until the connection is restored. However, if you don’t have to worry about internet outages, the cloud-based hosting option provides high-reliability thanks to a substantial amount of built-in redundancy


Overall, there are pros and cons to both options. Cloud-based hosting provides on-demand, elastic computing resources with flexible pricing that may offer considerable cost savings for every type of computing. On the other hand, on-premise hosting is a physical infrastructure environment that is available for use by a single client and retains complete access to all the resources on a private cloud.

Does your organization have the resources to make a significant capital investment? In that case, on-premise hosting might be your best bet. If you’re a budget-conscious SMB looking for a less hands-on approach, you might consider cloud-based hosting.

Need help deciding which option is best for you? PC Corp can help evaluate your options to select the best fit for your organization.

We make I.T. easy! Contact us to find out how.

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