Although cloud computing offers a highly desirable way to manage complex information technology (IT) resources — including computing power, networking, storage, and enterprise software applications — on-premises systems aren’t about to disappear. In fact, they remain essential for certain tasks, processes, and situations.
Indeed, as organizations map out a technology strategy, there are numerous factors to consider when choosing between these two types of IT environments. This includes underlying business requirements, the internal skills needed to manage resources, the overall cost associated with a particular approach, regulatory and compliance standards, and security needs. In fact, the vast majority of organizations rely on both cloud computing and on-premises systems to run their businesses.
Within a cloud computing framework, a service provider hosts the IT environment on its servers, which are virtualized and usually spread across multiple facilities to ensure high availability.
Cloud computing is appealing for several reasons. The responsibility for upkeep, patching, and overall system management resides with the service provider. There’s no major upfront investment in servers, systems, or software, and users pay only for the resources they use — as clouds use an operating expense, or OpEx, model.
Also, it’s possible to achieve higher resiliency because systems and data are typically co-located in different geographies. So, if one site goes down, another takes over instantly. This also aids in data backups and disaster recovery.
Because cloud providers handle tasks such as provisioning and configuring settings — and they have enormous resources on hand — it’s possible to achieve
In the case of IaaS, for example, this means that organizations can adapt quickly to major fluctuations in demand, and they can make changes without adding actual physical resources. Clouds also allow organizations to reduce the staff required for technical tasks or to redirect IT teams to more strategic tasks.
In addition, cloud service providers typically offer the most up-to-date features — and they support highly flexible and compatible containers, microservices, and service-oriented architectures (SOA). This is attractive to companies looking to build out and integrate digital technologies such as the Internet of Things (IoT), artificial intelligence (AI), robotics, and extended reality (XR). Clouds also can simplify DevOps and support other agile development practices.
On-premises refers to the traditional way of managing computing resources, networking, storage, and software, where everything is housed on a company’s own physical site, such as a data center.
An advantage to this approach is that an organization retains total control over hardware and software, along with settings and configurations. This may be an important consideration for organizations with strict security requirements or regulatory concerns. For example, a company may need to keep certain data outside a particular country’s borders.
However, an on-premises IT or data environment means that an enterprise must manage all resources on an ongoing basis. As a result, capital expenditure (CapEx) may be higher up front, and there’s a periodic need to refresh, upgrade, and patch hardware and software systems. It’s also necessary to manage licenses, handle integration between and among systems, and address performance issues or component failures as they arise. If something breaks — such as a server — it’s up to the organization to fix or replace it.
In some cases, the choice between cloud and on-premises frameworks may be a moot point. This includes situations where there’s a need for specific hardware components, networking capabilities, or software. However, the vast majority of providers now offer their platforms, services, and software in the cloud — and many also support hybrid environments. This provides the flexibility that some organizations require.
Organizations must carefully review and analyze their business and IT requirements — with an eye toward the future. As companies look to put various digital technologies into play, there’s a need for greater agility, flexibility, and scalability. Understanding what works best in a given situation is essential.
Selection criteria for cloud vs. on-premises infrastructures typically focus on five main areas:
In many cases, organizations rely on the public cloud for computing power, networking, storage, and software. Consequently, they share systems and server space with other companies — though each user’s data remains separate and secure. Private clouds are virtual environments set up on a company’s own servers. They combine the capabilities of clouds with on-premises hardware and software, but they may require considerable staffing and resources to operate effectively.
Today, many organizations rely on hybrid clouds that incorporate elements of public clouds and on-premises models. In a hybrid cloud, resources and software run in a combination of public and private cloud environments. This often appeals to organizations that require data flexibility or need to use elements of both clouds and on-premises systems and software.
It’s vital to understand how each approach impacts various factors, including:
As organizations venture deeper into digital technology, cloud adoption will continue to grow. Still, there are cases where on-premises will remain the better choice. In the end, it’s critical to understand whether public cloud, private cloud, or on-premises delivers the right set of features and capabilities for each particular organization.
The OutSystems low-code application development platform supports building and deploying applications in cloud, on-premises, and hybrid environments. To learn more about our platform, visit the Evaluation Guide.
