On-premise VS. Cloud: Which Leads To The Best Choice?
What are On-premise & Cloud?
Many people may find themselves hearing the terms “On-premise” and “Cloud” more and more often in the IT business community in recent years.
However, there may be many who still do not fully grasp the meaning of the two terms. We will explain in detail the difference between on-premise and cloud so you can acquire the correct knowledge.
On-premise
In English, the word “premise” means “building”, which implies that the information system is entirely in-house. The most important feature of on-premise is that the lines, servers, software, and other equipment necessary to build the system are installed in-house or in a data center.
If you want to build and operate your system in-house, on-premise is probably the right choice for you. Because you procure the tools necessary to operate the system in-house, it is easier to build your system.
Since the system can be built and linked as desired, it is easy to adapt it to the characteristics of your company. However, there is a disadvantage that the initial cost tends to be high. In addition, the amount of time and effort required for the operation and management of the system may be heavy for some companies.
Cloud
Cloud is a mechanism that makes storage, databases, and applications available over the Internet. All these are owned and provided by cloud service providers.
The Cloud can be used easily without having to install servers and networks on the company’s premises and the implementation will go smoothly because the company does not have to own the IT systems. Examples of Cloud services include Google Calendar and Google Spreadsheets, as well as webmail and social networking services. Companies that want to set up quickly should consider using the cloud at first.
Cloud is also divided into “private cloud” and “public cloud”. Private cloud refers to building your original cloud in a Cloud provider’s environment. Public cloud refers to use by an unspecified number of users. A private cloud is recommended if you want more secrecy as it can be used by both companies and individuals.
Characteristics of On-premise & Cloud
The most significant difference between on-premise and cloud computing is the server. The Cloud is a virtual server, while on-premise uses a physical server. Here, we list the top three characteristics of On-premise and Cloud to show you their differences.
On-premise:
- Can install and manage hardware in-house
- Have flexibility in customization
- Have a high level of security.
Cloud:
- Smooth implementation with no initial investment
- No need to manage hardware
- Freedom to increase or decrease resources
On-premise VS. Cloud
Now that we have checked out the general features of On-premise and Cloud, let’s focus on a few points to better understand the differences between the two.
Those who are considering implementing On-premise or Cloud may be particularly concerned about the following three aspects.
1. Security
In terms of security, On-premise is more secure than the cloud. In the case of the Cloud, all data is transmitted and received via the Internet. Since information retention and management are also outsourced, security tends to be weaker than On-premise. When using the Cloud, it may be best to be prepared for security risks before considering implementation.
On-premises, on the other hand, is more secure than cloud computing because the servers are installed in-house and there is no intervention by other companies. System construction and operation can be done in a local environment, so there is a sense of security.
2. Financial Aspect
Compared from a financial standpoint, Cloud is more cost-effective to implement. Cloud requires no initial investment and can be implemented at minimal cost. Even if you do not have a lot of human resources to devote to system development, Cloud does not require hiring and training of new personnel who are ready to work immediately.
This reduces the cost of recruiting and training, and at the same time, reduces the burden of receiving high-quality services. Companies that want to keep initial investment and operation and management costs as low as possible and want to operate a system without being constrained by costs should consider the cloud.
On-premises, on the other hand, tend to have a very large initial investment, as the company may have to purchase its server equipment. Don’t forget the cost of purchasing software and obtaining licenses. However, if you are using server sizing that suits your company for the long term, there may be cost advantages.
3. Operation Burden
Overall, the operational burden will be lighter with Cloud than with On-premise. On-premise systems are secure but if a server is damaged, data may be lost. In addition, if a hardware failure occurs, the burden will also increase. The risk is that the staff may have to stop their work once a failure occurs, as they need to be restored by their staff.
With the Cloud, the risk of data loss is reduced because the data can be stored on the Internet. If a failure occurs in the Cloud, the Cloud service provider will take care of it, reducing the burden on the company.
The same applies to backup implementation. While on-premises backup implementation is also costly and time-consuming to install equipment, the cloud allows for low-cost and smooth backup implementation.
Recommended Type by Industry and Size
Companies Suit For On-premise
Companies that are suited for on-premise implementation are medium and large-size organizations.
Once an on-premise system is built in-house, it must be operated and managed in-house. Operating and managing a system in-house will only be a burden for a company or organization with a certain level of human resources. Therefore, On-premise is suitable for medium-sized companies and large organizations that can devote sufficient effort to system operation.
In addition, if you want to integrate with already installed business systems, you may want to incorporate on-premise systems that are highly customizable. If you need to customize your system, on-premise is recommended over the Cloud. On-premises systems can be reconfigured to fit your company’s organizational structure and objectives, in addition to linking with your business systems.
On-premise is also a good choice for companies and organizations that place the highest priority on security. Because they can implement their security measures, they are no longer dependent on the provider of the system. Many companies in the finance and insurance industries, as well as in the service industry, utilize on-premise systems.
Companies Suit For Cloud
Small and medium-sized companies and start-ups are well suited for implementing Cloud. The Cloud can be deployed at a lower cost because it requires no initial investment. Small and medium enterprises (SMEs) and start-up companies are small and have limited internal resources.
Therefore, starting to use on-premise systems, which require large initial investment and operational burdens, may cause the company to become increasingly exhausted. However, with cloud computing, there is no need to install servers or build infrastructure in-house.
If your priority is to keep initial costs low, consider using the Cloud first. The Cloud also reduces operating costs. Most cloud services have a fee structure based on the number of users.
Furthermore, the Cloud does not require in-house maintenance and upkeep. Companies that do not have sufficient human resources and know-how to devote to the construction and management of information systems are advised to take the easy way out and start with the cloud.
Even if you do not have the internal resources, Cloud can be implemented quickly. Staff can quickly become accustomed to the new system, and business efficiencies can be realized smoothly. The Cloud is widely used in the construction, transportation, wholesale, and retail industries. It is also a popular service for companies that focus on telework, as it can be easily accessed from outside the company.
Companies Suit For On-premise and Cloud Hybridization
In 2022, the most common trend across all industries will be on-premise and cloud hybridization. On-premise and cloud hybridization refers to a form that incorporates the characteristics and functions of both on-premise and cloud.
It is also called a “Hybrid Cloud,” and an increasing number of companies are adopting the attractions of both on-premise and Cloud in a way that puts the right person in the right place. Hybrid Cloud incorporates the advantages of both on-premise and Cloud and can cover the disadvantages of both.
Recently, even the financial industry, which is strict about information management, is adopting Cloud functions and using both on-premise and Cloud. For example, it is not uncommon for companies to use the Cloud for data that they want to share throughout the company while managing highly confidential data such as customer information On-premise. Companies that use both On-premise and Cloud computing are most often deploying On-premise for enhanced security.
On the other hand, publicly available web servers, for example, are installed in the cloud to take advantage of its flexibility to increase or decrease resources and its high processing power. In any case, the use of on-premises and the cloud must be combined according to the company’s business and environment.
Summary
On-premise and Cloud computing have become essential for doing business in recent years. Consider implementing cloud services if you have financial concerns, and On-premise if your company has security concerns. For a more detailed overview of cloud services, we recommend contacting the cloud provider directly.
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