Cloud vs. On-Premises: Make the best decision for your organization.

Those that have experienced the implementations of both Cloud and On-Premises software suites can attest that their costs are roughly equivalent.

The most obvious difference in installation savings of a Cloud deployment come from the sizeable and tangible cost reductions associated with the cost of servers, and the reduction in equipment maintenance required for on-premises solutions. Depending on the size of an organization there is either the elimination or reduction of IT staff hours that formerly focused on maintaining the hardware infrastructure. 

Which is best for you? 

Industry Analyst, Louis Columbus, concurs: "The best results are being attained by enterprises that focus on a very specific strategy and look to cloud-based technologies to accelerate their performance. Those enterprises that look to cloud platforms only for cost reduction miss out on their full potential." 


When Cloud Computing Makes Sense

  • Reduced cost: When you have your application running in the cloud, your IT staff doesn't have to worry about servers, networking and operating system software support. Those things are being taken care of by the cloud provider.
  • Cash flow: when deploying a large system on-premises that requires multiple servers and software, a large up-front cash outlay is also required. When using a cloud, normal charges are billed on a quarterly or yearly basis as an operating expense rather than a capital expense. This improves a company's cash flow.
  • More robust environment: Cloud providers build their infrastructure to support high-speed, load-balanced environments. This means that running in the cloud allows a company to quickly scale up their application without a large additional investment, or scale down and only pay for what's needed. 
  • Faster start-up and time-to-market with a SaaS-based enterprise application: With a cloud offering, you can get started much faster than with one that requires you to obtain your own hardware and software. 
  • Nothing to install: Enough said. 
  • Freedom for the line-of-business manager: Cloud-based applications are paid for from operating-expense (OPEX) budgets, which frees up the line-of-business manager to pay for just what they need. They also are free from the lengthy and often complex capital expense (CAPEX) budgeting processes that IT departments have historically relied upon. 
  • Greater flexibility in defining workflows: Cloud applications are more adept at being configured from a workflow standpoint since they are designed for rapid updates and customizations. 


When On-Premises Works

  • Total cost of ownership (TCO): Paying a low quarterly or yearly subscription for software certainly helps a company’s cash flow. However, over the long term, the software does become more expensive. For example, suppose a company is looking to purchase some software for $3,600, or they can pay $100 per month. After three years, the amount paid for the subscription is identical to the purchase price. But after those three years, the subscription will begin to cost more than the purchase. 
  • Outside risks: When software is hosted on-premises, everything resides within the walls of the company. When it is hosted in the cloud, the cloud provider has access to and control of the hardware and software. If the cloud provider's security controls are not as robust as those of the company, the risk of failure can be greater. 
  • Data control: The US Patriot Act requires some companies to keep their data within the boundaries of the United States. This limits some of the flexibility that cloud providers allow in terms of deploying applications close to the user. Additionally, having an on-premises solution may make sense when you need to keep sensitive or regulated data local. Digital Designs provides country-based solutions in the United States, Canada, Australia, the United Kingdom, and others. 

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