Comparing Costs and Benefits of On-Premise vs. Cloud Servers

In the battle of cloud vs. on-premise servers, there isn’t necessarily a clear-cut winner. Which solution delivers the knockout punch will depend on factors specific to your business.

We’ve gone 7 rounds comparing key areas you need to consider as you weigh your options.

1. On-Premise Servers Usually Have Longer Deployment Periods


You’ll have to research the hardware you want to purchase and figure out how it will be integrated into systems. The process will take several days or even weeks.

Deployment itself will take hours or days, depending on how extensive the project is. You’ll need to plan for downtime and may not have the talent and expertise required in-house.


You can deploy the cloud in a few minutes for relatively little cost. The heavy lifting comes later, when you start to migrate your on-premise systems to the cloud.

2. Consider More Than Dollars When Comparing Cost


There are significant upfront capital expenses associated with the purchases of hardware and software. The appropriate number of personnel must be available to support your on-premise systems and will have ongoing operating expenses for maintenance and monitoring.


There are few upfront expenses to the cloud. It is an operating expense and you pay as you go. If you’re only thinking about dollars, the cloud may cost you more over the long run. But, it may be worth it because you’ll have fewer maintenance and security headaches.

Word to the Wise: Pay attention to what you’re getting. It’s not only about the acquisition cost. The cloud could “save” you by removing maintenance headaches or by providing more stringent security features.


1. What headaches are you losing?

2. What risks are you assuming?

3. Capital expenses + operating expenses for maintenance

3. Security is Always Critical


Security is all on you. It can be a manual process and protecting your business against cybercriminals isn’t easy.  You need an internal or external security expert who is following the latest cybersecurity threats and can develop a plan to protect your organization.


It’s widely believed the cloud is breached more, but the cloud is a bigger target for hackers. In most cases, we believe the cloud is more secure than on-premise servers. The risk of a breach is too great for anyone, but a provider will invest heavily in security. They will outspend you, every time.

4. On-Premise Servers Require More Maintenance


If you have an on-premise server, you’re responsible for:

  • Operating system and software patching
  • Security updates
  • Physical hardware maintenance

These are regular, recurring tasks, and you may find it difficult to find the right support. Fewer technicians are specializing in on-premise servers. You may need to fly someone in from out of state to quickly fix a critical server, driving up the overall cost of your on-premise solution.


Operating system and (in some cases) software maintenance is done for you. Programs and security updates are implemented automatically, and there’s no physical hardware to maintain.

5. The Cloud Delivers Scalability


It is very difficult to scale on-premise servers because you need to go through the entire deployment process again. If you unexpectedly need to downsize, you’ll be stuck with resources you no longer need.


In the cloud, you can scale up or down at the click of mouse. If your organization has aggressive growth plans, or operates in a seasonal industry, the cloud is an attractive option.

6. Compliance is Never Automatic


Storing all your data in-house doesn’t automatically make you compliant, and it could be a bigger risk for your business. You must have the right resources lined up to implement policies and properly configure and maintain systems to avoid regulatory missteps.


Some, but not all, of the technical compliance burden is shouldered by your cloud provider and many data centers offer certifications of compliance regulation. But, it is still on you to check standards are being adhered to. Remember, no cloud provider will indemnify you for a breach.

Word to the Wise: Ultimately, all regulatory compliance is the responsibility of the organization. Whether you’re on on-premise or in the cloud, it falls on you.

7. On-Premise has Fewer Connectivity Issues


An internet connection isn’t necessary, and an outage may not significantly impact your business or cause downtime.


You are completely dependent on your internet connection. Along with strong connectivity, consider building in redundancy. Have a plan in place so employees know what to do if there is an outage.

Which is Right for You: On-Premise or Cloud-Based?

Don’t make a decision based on isolated factors like price or security alone. Take a comprehensive view of what on-premise and cloud-based solutions offer your business. Consult a team of IT experts, like Accelerate, to assess your needs and set a strategy tailored to your business’ objectives.

Contact or call us today 317.596.3650

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