Advantages of Cloud vs On Premise

Are you considering a move to the Cloud? Many companies in this digital age have taken the plunge and embraced using cloud-based applications and storage to run their business instead of the traditional on-premise set up. While most do it for simplicity sake, the challenge comes when considering CapEx vs. OpEx budgets. The question arises does your organization have the upfront investment for on-premise servers or is an increase in your operating expenses more desirable. Both cloud-based and on-premise set up have their advantages.

With so many businesses employing remote workers, cloud-based solutions may make more sense in the long run.

Shalakay Gibbs
The Cloud-Based Advantage


any companies are moving away from the capital expense model. Instead, they are opting to spend a more on their operating expenses. Cloud-based computing and storage are areas which increase the operating budget but decrease capital expenses overall. There are many advantages to taking this approach.

Providers make it easy for you to ensure the cloud services they provide meet your needs. Almost all cloud service providers offer a trial period that allows you to test all their features for a period, usually between 15 and 30 days. During this evaluation period, take advantage of testing which applications already in use easily integrate into the cloud service. Most are compatible with top applications such as Salesforce and Dropbox.

While cloud-based systems do add to the overall operating expenses, there is a lower cost to begin and maintain the service when compared to on-premises operation. No longer do you have to buy and manage servers at the local facility. Instead, the cloud provider is responsible for security on their servers, including the ones containing company data. In the event more space is necessary, cloud-based services can scale to meet demand with only a minor increase in cost.

With so many businesses employing remote workers, cloud-based solutions may make more sense in the long run. Cloud applications are available from any web browser. Employees only need their user id and password to access their work and communicate with coworkers and supervisors.

Advantages of Staying On-Premise

With all the benefits of moving data to the cloud, it might seem difficult to imagine that some companies find on-premise systems to be in their best interest. On-premise servers do help lower the overall operational expenses. However, they do raise the capital expenses as the equipment maintenance, and upgrades fall on the company and not a third party. There are benefits to choosing this route.

Regarding security, country or state regulations may require specific data remain in-house. Keeping sensitive information out of the cloud and storing it locally provides greater protection. With the information on-premise, you do have more control over who accesses it and how to share it with others.

An ongoing concern with cloud-based usage is how to access data in the event of an outage. Internet connectivity, like anything else, can go out on occasion. For most cloud services, this means data is inaccessible to their clients who are suffering from an outage. On-premise servers allow business to keep working even if the internet is down for a period.

Cloud companies strive to make their services fit every need, leaving them feeling a little generic. When hosting applications and storage on-premise, the IT department can customize how programs look and behave. They can block some users from specific applications if it has nothing to do with their job. They can also customize login requirements for tighter security.


Determining which option is best for your company, depends on what your CapEx and OpEx budgets are. Those who have a little more to spend in their CapEx fund and want to maintain control over their data are better served using on-premise servers with an IT staff to control them. However, those with limited CapEx budgets may find it better to increase their OpEx budgets and utilize cloud-based services.

Shalakay Gibbs
Shalakay Gibbs

Shalakay is the CEO of SuiteSciens. She is an ERP consultant with over a decade of experience leading cloud infrastructure development projects for companies like Lyft, Bombas, OmniGuide and Citibike. She has a strong focus on Change Management as well as & Governance, Risk and Compliance.

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