Today, most business owners have to decide whether to store their data on the cloud or an on-premise IT system. The most logical way to go about this is to consider the cost implications; however, there are many hidden costs that need to be taken into consideration when comparing the two options, such as some of the following:
Cloud
The recurring monthly service cost is often the main and sometimes the only cost factor that is considered when comparing cloud solutions with the on-premise option.
Pros
• Although much is said about cloud solutions outages, public and private clouds still provide much better reliability and uptime than on-premise systems.
• In the long term, the total cost of ownership (TCO) for cloud solutions is much lower than that for on-premise systems for most businesses.
Cons
• Offloading hefty workloads to the cloud demands sufficient bandwidth. Without it, any savings you might be making from not running an internal server could potentially be negated; slowness and productivity loss might become a problem. Similarly, any increased needs in internet connection costs should be accounted for in an objective comparison of moving to the cloud versus staying in-house. If you are contemplating moving to the cloud, speak to a trusted consultant for advice on the amount of bandwidth you need for your business.
• When dealing with cloud servers, you will often find that while you can move as much data as you wish into the server, pulling data out usually comes at a cost after a certain threshold.
• Moving large amounts of data to the cloud may take a significant amount of time depending on your office internet connection; it may not be enough to transfer these workloads in a timely manner between endpoints.
On-premise IT systems
Many people mistakenly believe that the cost for on-premise systems start and stop with how much they need to pay for new hardware and software.
Pros
• They are more suitable than cloud solutions for large capacity file sharing of 50GB or more, or for operations that would be bandwidth-prohibitive in a cloud scenario, such as rural offices with weaker internet connectivity.
Cons
• In contrast to standard computers and laptops, the average server has a mixture of multiple-socket processors, dual power supplies, multiple hard drives and numerous other components that all increase your electrical overhead cost. You should also factor in the cost of cooling your hardware, which is critical in maintaining these components.
• On average, organizations replace on-premise systems every 5 years, which means you will incur upgrade costs to retire old servers. Even if staying in-house may be cheaper than moving to the cloud when you consider the monthly costs, your five-year upgrade or replacement costs could be even more expensive, and opting for cloud solutions may still be better in the long term.
It is worth noting that while one solution may seem more favorable than the other, it may not apply to all businesses. As such, it is important to objectively compare these factors based on your business needs and make the most suitable decision accordingly.