In the world of IT infrastructure, businesses are often faced with a key decision: whether to adopt on-premises (on-prem) technology or move to the cloud.
The key difference between on-prem and the cloud is where company data is being stored and accessed. With on-prem, company technology is hosted locally on its own hardware. On the cloud, company data is accessed through a third-party server on the internet. Both approaches have their advantages, but they cater to different organizational needs. Below, we break down the differences:
On-Prem Technology
On-premises technology involves hosting software, applications, and data on hardware physically located within an organization’s facilities. This gives the company full control over its infrastructure, from security to maintenance.
Benefits:
There are numerous benefits to on-prem technology, the first being complete control. When storing data on-premises, businesses have full ownership of hardware and software, ensuring that sensitive data stays in-house. If your company manages data that is exceedingly sensitive or private, on-prem technology ensures that nobody outside the company can access your data.
Another benefit to on-prem technology is its customizability. When building and storing data manually, systems can be tailored to a company’s specific needs without reliance on external providers. This gives companies a great deal of control over platform features such as interface setup and integration with other platforms.
Sounds expensive, right? You’d be surprised. While upfront costs to initiate on-prem usage are higher (due to hardware and setup), ongoing expenses are relatively consistent. Plus, when dealing with high-risk information and data, many companies would rather opt for a more expensive, high-security setup, rather than risk a security breach.
Challenges:
Despite the benefits to on-prem technology, there are nonetheless drawbacks to consider when making the choice of which system to adopt. The first challenge to on-prem is a high initial investment, including hardware, licensing, and setup costs. Placing data management in the hands of a third-party vendor is often an easier cost to justify for companies, especially those who manage less sensitive data.
Another potential concern for on-prem adopters is the maintenance requirements for proper upkeep. With on-prem technology, in-house IT teams are responsible for system updates, troubleshooting, and backups. This could potentially strain teams who manage large amounts of technical infrastructure.
Finally, companies considering different IT solutions should consider the limitations of scaling on-premises technology. Because of the time and resources needed to custom-build a platform for company software, any adjustments in size or scale are likewise costly. While ongoing expenses are relatively low, as already mentioned, major pivots or changes are a cost that companies should account for if they choose to adopt on-prem technology.
Cloud Technology
Cloud-based technology stores and processes data over the internet, using remote servers managed by third-party providers such as AWS, Microsoft Azure, or other cloud-based services. In this case, users can access applications via the web without requiring local installation or customization.
Benefits:
One of the major benefits of cloud-based technology is its flexibility. These solutions can be scaled up or down depending on user needs, which makes these conditions ideal for growing businesses. In essence, cloud technology can grow with a company.
Another advantage to using cloud technology is the lower costs to get off the ground. With cloud-based services, companies pay for usage via subscriptions, which helps them avoid expenses upfront from having to custom-build a platform.
Finally, companies who choose to pay for cloud technology through a third party provider reap the benefits of not being responsible for infrastructure maintenance. In this case, service providers are responsible for any updates, security, and fixes that may be required, reducing the burden on companies.
Challenges:
The lack of responsibility needed for cloud based technologies comes with a few drawbacks- one of them being the cost. While it may initially cost less to subscribe to a public cloud provider, those costs can add up over time, and cause a logistical headache along the way.
Another consideration to make is the dependency on internet activity when using a third party provider. If a cloud provider suffers a service outage or maintenance issue, it could affect their clients’ ability to use the platform. While these issues are typically resolved quickly, being dependent on another source for access to company platforms may cause the occasional annoyance.
Finally, companies considering using a cloud provider should be aware of the drawback of having limited control over their data. While a company’s data belongs to them, they still have to place trust in cloud providers to handle and protect the data. If the provider is hacked or targeted by cyberattacks, companies’ data could be put in jeopardy.
Choosing the Right Fit
The choice between on-prem and cloud technology depends on factors such as budget, security needs, scalability, and IT expertise. For industries like finance or healthcare with strict compliance requirements, on-prem may provide greater assurance. On the other hand, startups and businesses with fluctuating needs may benefit from the scalability and cost-effectiveness of cloud solutions.
Understanding these differences is essential for making informed decisions that align with your organization’s long-term goals. At Colors AI, we’re proud to offer a product that is compatible with either format, adjusting to your company’s needs to ensure a seamless and effective AI solution.
