On Premise vs Cloud – Which is Best?
This is a question we get asked time and again! When customers are thinking about replacing old servers and equipment the temptation is to cut those costs as much as possible and avoid any hefty upfront fees.
For some companies, a totally cloud solution will fit the bill perfectly, but for most people we speak to it’s not the best way to go. So how do you choose?
Write Down Your Requirements
It sounds simple but many people we go to see have not thought through what they actually need to do in their business with regards to their IT. They think they have to have technical knowledge to define any form of specification whereas in reality, any IT Provider needs to know what you use your computers for now, what you would like to do and what your plans are for the future.
This doesn’t need to be in technical terms but from a practical viewpoint i.e “John needs to be able to check his email wherever he is” or “we need any staff member to be able to access the data and email in the office should they need to work from home occasionally” or “We are looking to bring on a new sales guy next year and he will be mainly based from home”
This will help to determine which applications and services you need, from here we can determine if these are suitable for a Cloud environment or if you will need to have some data and applications on-premise.
Review Your Disaster recovery Strategy
Most smaller companies don’t even have a DR strategy so now’s a good time to think about it. How important are your computer systems to you? If your server was offline for a day or even a week, what impact would that have on your business?
Could you work from home if your office was unavailable or is this not practical (because you need other equipment, files, telephones)
Much of the monthly fee spent on Cloud Solutions is for the data Centres that host the servers and the security they provide. Yes, there are other benefits, which we will come on to later, but you are paying for redundancy of servers, multiple power and data network feeds and 99.99% uptime. If this is necessary for your business, maybe for compliance or because your business relies so heavily on your servers that any outage would be disastrous for you, then a Cloud solution would work out more cost effective than trying to implement these sorts of security and resilience features yourself.
How Good is your Internet Connection?
There are still plenty of places in the UK with a mediocre Internet connection. There is no point trying to implement a Cloud solution without a reliable and fast broadband connection. The size of pipe you need will depend on the number of users and the applications and data they are using but for a small office of say 10 people you would want a good BT Infinity 80/20 connection at least. This should be dedicated to your data traffic and not shared with VoIP phone systems or connections from Branch offices.
If considering a Cloud solution for all or part of your infrastructure you must make allowances for a good Internet connection. If your systems are vital to your business then you will need to consider investing in a dedicated line, which could add £2000 – £4000 per annum to your costs but will ensure good SLA’s to resolve any faults and a fast, reliable, dedicated connection.
Where’s Your Data?
Most of the larger Cloud Service providers these days offer regional hosting, which meets with the data regulations some industries enforce where data must be held within certain jurisdictions. Smaller, cheaper hosting options do not offer this though and your data could be held in servers all around the World.
With an on-premise server, you know your data is there, in your offices and you can retrieve and delete as you want, move it to other hardware, you have full control.
In a hosted environment, do you know where your data is? What happens if you’re hosting company goes bust or you have a falling-out? Could they hold you to ransom over access to your data?
Who else has access to those servers? Again, the larger hosting companies have very stringent security but what about the cheaper, smaller solutions?
On-Site Security & Networking
This is the area we have most difficulty with in purely Cloud environments. If a company gets rid of their on-premise server completely they are getting rid of their central network controller. It’s like going back to the 1990’s with simple Workgroup networks and nothing to offer any central security or management facilities.
It’s more difficult for users to share PC’s, unless they use generic login details. Peripherals such as Printers take longer to set up as they have to be configured individually for each PC and possibly each user on each PC.
For Companies that have mainly home-based workers or users with laptops this isn’t too much of a problem but in an office with 10 PC’s where they want the ability for any user to log in to any PC it’s virtually impossible to manage.
For many Companies, a Hybrid environment is the best solution, with a small server onsite to manage network security and other services such as Email, CRM and File Sharing based in the Cloud.
Which is Cheapest?
The simple answer is that a good, stable solution, either on-premise or in the Cloud, will not be “cheap”.
On projects we have compared so far, a good Cloud solution will have a higher TCO over 5 years than an on-premise solution, though there are other trade-offs to consider such as always having the latest versions and ongoing management of the core systems.
An on-premise solution will require higher up-front costs (though these can be managed with a finance or leasing solution). It will also fit into the Capex side of your budget. You will also have assets registered on the books and depreciation of those assets over the next 3-5 years.
A pure Cloud solution will have lower upfront costs, though don’t expect installation and configuration to be any cheaper than an on-premise solution. The majority of these costs can be put against Opex and you will not have the assets or depreciation.
With regards to ongoing support, again, don’t expect to make substantial savings on an outsourced support contract with a cloud solution unless you want to be managing this with the cloud provider yourself. Protection and support for the PC’s and laptops is just as important in a Cloud environment and, although you don’t have a physical server to support and maintain, User support is still as important in a cloud environment as with on-premise.
So, which is best?
The simple answer is that Cloud, on-premise and hybrid are all good solutions if they fit your needs.
Take time to consider your options and your requirements and do not just consider the bottom line figures. It will be more costly if you make the wrong choice!
Choose an IT provider which has experience of all 3 scenarios so they can give an unbiased opinion based around your needs and not their margins.
Be honest about how much time and technical ability you have in house to dedicate to implementing and supporting a new solution. Some Cloud services are advertised as ‘out of the box’ small business solutions. In reality, they take time and expertise to set up properly. Can you afford a week out of your business to dedicate to setting this up or would you rather concentrate on running your business?
If you would like more information on any of the solutions discussed here or would like an informal chat about your future plans, please contact us.