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On-premises vs. the Cloud: Where Should Your Servers Live?

Everybody has an opinion about where small businesses should house their infrastructure. And just like everything else, it depends.

Where your servers should be located in your organization is an important decision, and the choices you make can have significant ramifications over the long term. Some will tell you that security is best served with servers in a location where you have complete control, such as your own server room or data center. Others will say that locating in the cloud is just as secure, plus less expensive.

What really matters is that this decision needs to be one that meets the needs of your organization. You can't depend on generalizations. Equally important, when choosing whether your server should be in the building or somewhere else, you don't necessarily have to select one over the other. 


Having your servers on premises means that the servers and related equipment are located physically somewhere in your company. Depending on the size of your organization, that location might be a closet, a computer room, or a data center. You're responsible for operating the servers, backing them up, ensuring that data is stored somewhere safe, and that you're providing appropriate power and cooling.  

Depending on the nature of your operations, you may also need to provide emergency backup power for your servers, and some kind of fail-over for a server if it goes offline. You will also need to have skilled staff who will operate the servers and either maintain them or arrange for maintenance.

An on-premises server can be made physically secure. You control all access to the server, and only your employees have access to your data. It also means that the servers are connected to your internal network, so performance can be as fast as you want it to be. But to keep it fast, your staff will have to upgrade the servers when needed, and they'll have to keep software updated. Your staff will also be responsible for all aspects of security.

In the Cloud

When you say that your servers are in the cloud, they're located somewhere other than your premises and operated by another company. That other company maintains the servers, handles physical security, and may handle hardware and software updates. Depending on your contract with the cloud provider, they may handle backups and long-term data storage, too.

With the cloud, data security is a shared responsibility. You're still responsible for security in your offices, although the cloud provider will probably offer data encryption from the point where the data leaves your network.

You may find that your data and your computing resources in the cloud are shared. This means that your server may be virtual, and you're sharing the hardware with several other customers. It also means that non-employees likely have access to your data and applications.

Some aspects of performance in the cloud won't be as good as they might be on-premises, mainly due to latency. You're accessing the cloud-based computers through a wide-area network connection, usually the internet.  An extra layer of networking, plus the unpredictable nature of the internet, mean that the path your data follows may vary in bandwidth and speed, and outside influences may affect your data.

Worse, if there's an internet outage, you lose access to your applications or your data. You're effectively out of business until the outage is resolved.


It's a common belief that cloud computing and storage are cheaper than on-premises, but that isn't necessarily the case. While there are large upfront costs if you're building an on-premises data center from scratch, you may not have to do that. You may, in fact, simply build your server room or perhaps a data center over time, expanding as your needs grow. Your data center staff will still need to be paid, of course, but whether the staff is your employees or the employees of the cloud provider, you're paying for them one way or the other.

Cloud providers will charge you a monthly subscription fee. Depending on your contract, that fee can change, sometimes with little warning. For example, if your workload needs expanded compute resources, you're going to pay for whatever you use. Likewise, you may find yourself paying more for storage as your needs grow.


Not all applications are cloud-friendly. In addition, not all applications handle latency well. You could find yourself in a situation where you have to choose between upgrading or replacing your applications to use the cloud, and you may find that doing so is impractical.


If your organization is subject to compliance requirements, whether they're government privacy regulations or industry requirements, you are responsible for meeting them. This means that your cloud provider must be capable of meeting those requirements, but your responsibility doesn't end there. It's your job to confirm that the services you use are in compliance, and that means you will probably have to audit your cloud provider.

Why Choose?

In the real world, things aren't binary. You don't need to choose between on-premises servers or cloud servers. You can have both.

For many, perhaps most, companies, some work is best done on-premises to satisfy performance and security requirements, while other work can benefit from the flexibility of the cloud. By spreading the workload around, you can get the best of both worlds in terms of cost and performance, while also meeting your security needs.

One Cloud Requirement

The one function where the cloud is necessary is in off-site backup. Regardless of your other requirements, off-site cloud backup (where your data is stored in geographically dispersed locations) is necessary for your organization's long-term survival. While they may seem unlikely, natural and man-made disasters can happen at any time. You don't want the next weather event, wildfire, or terrorist attack to be the epitaph for your company. Secure cloud backup storage is the only way to make sure that doesn't happen.

So how do you handle all of these various on-premises and cloud implementations? One good way is to investigate Dell's Apex cloud services, which provide a management platform for your cloud, multi-cloud, edge and on-premises needs.

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