As IT teams consider the best resources for deploying cloud workloads, the choice often comes down to on-premises vs. cloud infrastructure. Public cloud resources offer extraordinary scalability, lower costs and access to next-generation technologies. Private cloud or on-premise infrastructure provides more control, security and visibility.<\/p>\n\n\n\n
However, when it comes to software computing, there is not much difference. Simply put, the difference between on-premises vs cloud software is the location. <\/p>\n\n\n\n
On-premise software is installed and runs on a company’s own hardware infrastructure, and is hosted locally, whereas cloud software is stored and managed on the provider’s servers, and accessed through a web browser or other interface.<\/p>\n\n\n\n
On-premise infrastructure, or private cloud, is a cloud environment that is available for use only by one client. Rather than sharing a pool of resources with multiple customers, companies have complete access to all the resources that a private cloud provides. <\/p>\n\n\n\n
Private clouds may be located within an organization\u2019s data center, or located off-site and managed by a third party. They provide a more secure environment that can simplify compliance with stringent regulations. They also simplify data governance and data locality issues and can deliver high SLA performance and efficiency.<\/p>\n\n\n\n
This computing model consists of software downloaded to a physical device an organization owns. People often use the term in reference to an organization\u2019s data centers, including corporate-owned servers, networking systems, and system components. Additionally, on-premises can refer to internally designed applications specific to the organization\u2019s use cases.<\/p>\n\n\n\n
Cloud computing is a model where another organization owns the servers, storage, databases, and software, delivering them \u201cas-a-service\u201d to customers. Instead of owning the hardware and software, the organization pays to use the services when it needs them.<\/p>\n\n\n\n
Cloud infrastructure, or public cloud solutions, provide elastic computing resources on demand with pay-as-you-go pricing that offers considerable cost savings for enterprise computing. Public cloud solutions are fully managed by third-party providers, relieving IT teams of the need to purchase, install, manage and upgrade technology on-site. <\/p>\n\n\n\n
Public cloud offerings can scale easily to meet unpredictable workload demands and provide high-reliability thanks to a great amount of redundancy. Also, public clouds can provide access to next-generation services like AI\/ML, containers, blockchain, serverless computing and cloud-native applications.<\/p>\n\n\n\n
Some services that organizations pay for using this on-demand model include:<\/p>\n\n\n\n
Three\u00a0types of cloud service\u00a0models\u00a0exist:<\/p>\n\n\n\n
Additionally, cloud computing incorporates the following types of technologies:<\/p>\n\n\n\n
Cloud and on-premises deployments both run applications and enable business operations. However, they have several important differences. These include security, maintenance and management, resource availability, payment models, and financial accounting.<\/p>\n\n\n\n
Security across cloud and on-premises deployments is one area with no clear winner. Each deployment has its own benefits and costs which is why leadership needs to understand them before making a decision.<\/p>\n\n\n\n
In an on-prem deployment, the organization has total ownership over security. If the company has the security resources, this gives it a better way to mitigate risk. However, it also makes them entirely responsible for maintaining and monitoring security continuously.<\/p>\n\n\n\n
Many organizations looking to improve on-premises data center security leverage managed detection and response service providers.<\/p>\n\n\n\n
Cloud application security\u00a0is a shared responsibility. Under this model:<\/p>\n\n\n\n
For example, if a threat actor exploits a vulnerability in a server owned by the cloud provider that leads to a data breach, the provider is responsible. If the threat actor exploits a misconfiguration managed by the buyer, then the buyer is responsible.<\/p>\n\n\n\n
Understanding the different maintenance needs for each deployment type can help you make informed IT decisions.<\/p>\n\n\n\n
Since the organization owns the software, firmware, or hardware, it is responsible for all maintenance activities. These activities include installing security patch updates, maintaining data center availability, and responding to service requests.<\/p>\n\n\n\n
When utilizing SaaS, the service provider pushes updates to the cloud resource without end users needing to act on their own. Organizations transfer responsibility for vulnerability patches, uptime, and backup to the service provider.<\/p>\n\n\n\n
However, when using an IaaS or PaaS provider, organizations are responsible for maintaining and securing applications and workloads within the cloud environment.<\/p>\n\n\n\n
Resource availability is the primary differentiation point between cloud and on-premises deployments.<\/p>\n\n\n\n
On-premises resources offer finite storage and computing power. Since on-prem resources like servers have limited memory, organizations need to consider the way in which they want to use them and how long they think they will maintain them. Often, this leads to underspending or overspending.<\/p>\n\n\n\n
It also limits things like application, database, and storage use.<\/p>\n\n\n\n
When companies move to the cloud, they often do it because the cloud is \u201cscalable.\u201d\u00a0Gartner defines scalability\u00a0as a system\u2019s ability to increase or decrease in performance and cost in response to changes in application and system processing demands.<\/p>\n\n\n\n
In other words, organizations can use as much computing power, storage, and services as they need at any given time. Since the cloud provides on-demand services, companies are not limited to the capabilities of their existing hardware. As the company\u2019s computing needs grow, they can add more resources.<\/p>\n\n\n\n
Many organizations struggle when they move to the cloud because of how they pay for services.<\/p>\n\n\n\n
On-premises software often uses a licensing model. With licenses, an organization pays a flat usage fee, giving them the ability to distribute the software to as many workforce members as they want during the license period.<\/p>\n\n\n\n
The main license models are:<\/p>\n\n\n\n
While most organizations can manage license models easily, they often come with their own problems, including:<\/p>\n\n\n\n
Cloud resources use either a subscription-based or usage-based pricing model:<\/p>\n\n\n\n
As organizations migrate to the cloud, many find they may include:<\/p>\n\n\n\n
The differences in computing decisions also impact financial reporting and forecasting. In many ways, this difference is one of the most difficult paradigm shifts organizations face.<\/p>\n\n\n\n
On-prem technologies are considered capital expenditures (CapEx). The organization pays the total cost for the technology upfront, then the value reduces over time.<\/p>\n\n\n\n
While OPEX offers flexibility, the variability can be difficult to manage, especially if the company struggles to manage cloud costs efficiently. CapEx is a fixed cost with quantifiable depreciation values, making long-term financial forecasting easier.<\/p>\n\n\n\n
With CapEx linked to income and profitability, moving away from on-premises computing requires an accounting paradigm shift that many organizations struggle with.<\/p>\n\n\n\n
Operating expenditures (OPEX) are the everyday costs businesses incur. Generally, these costs cover products and services with a limited lifespan that an organization consumes regularly.<\/p>\n\n\n\n
The cloud\u2019s scalability and shorter-term subscription-based pricing mean many organizations report these services as OPEX. In doing so, organizations have greater flexibility and more opportunity to make changes to their IT services than they would otherwise. If the organization can appropriately control cloud costs, then it can reduce its operating ratio, indicating financial efficiency.<\/p>\n\n\n\n
Cloud and on-prem technologies differ as do the costs associated with them. Although many of the cost differences arise from how the technologies work, drilling into them more specifically provides additional insight as an organization looks to migrate its operations.<\/p>\n\n\n\n
Hardware consists of the physical devices an organization uses to run the technology.<\/p>\n\n\n\n
With on-prem deployments, the organization needs to pay for the hardware. This means that despite the depreciation over time, the organization has to consider the longer-term replacement costs. This can create a challenge when hardware fails earlier than expected or is compromised.<\/p>\n\n\n\n
The good news for organizations \u2014 and one of the reasons for increased cloud adoption \u2014 is the cloud requires no physical hardware. Fundamentally, the organization gets to take advantage of the benefits while the cloud takes care of the hardware.<\/p>\n\n\n\n
Maintenance costs also differ between cloud and on-prem deployments, especially when considering the cybersecurity and IT skills gap.<\/p>\n\n\n\n
Since the organization owns and controls the hardware, it pays all maintenance costs. These costs include:<\/p>\n\n\n\n
The cloud services provider pays for the hardware, software, and firmware upkeep, passing that on in the subscription cost. However, organizations should consider the costs associated with:<\/p>\n\n\n\n
Deciding between managing your infrastructure and embracing cloud solutions is about finding the best fit for your needs. Some companies opt for a mix of both approaches, benefiting from the cloud’s agility while addressing concerns through hybrid strategies. <\/p>\n\n\n\n
By understanding the benefits and challenges of on-premises and cloud computing, you can make well-informed choices aligned with your goals and resources.<\/p>\n\n\n\n