While many businesses have already switched from local to cloud-based servers, other organizations are still exploring their options. Some businesses have been reluctant to move to the cloud because they've recently purchased on-premises servers, are concerned about data security, or are unsure about the cost benefit.
If this sounds familiar, then this article is for you!
In this article, we will discuss the pros and cons of local (on-premises) and cloud-based servers for your business.
The truth is that both options have advantages and disadvantages. The right solution for you will depend on a number of factors specific to your business needs.
The goal of this article is to provide clear, easy-to-understand, and honest information you can use to make the right decision for your business.
A cloud-based server is a virtual server that is hosted in the cloud. These virtual servers are administered by a cloud service provider that handles the care and maintenance of the server. Like a physical server, a cloud-based server stores data and runs applications.
Cloud-based (or cloud-hosted) servers offer a number of advantages.
They include:
Cloud-based servers can be spun up (or built) in hours and configured in just days. This means they can be deployed quickly.
Servers hosted in the cloud are easier, faster, and cheaper to scale (either up or down) when your business demands change.
This flexibility provides adjustable server capacity (including storage space and processing power) to meet your business needs. This can be especially beneficial if your business is cyclical or seasonal. You get access to the server capacity you need when you need it.
There is a perception that cloud-based servers are less safe than on-premise options.
Cloud-based servers, however, have robust security controls built-in provided by the vendor, including firewalls, advanced encryption, and access controls. These offer increased cybersecurity protections for the sensitive data you handle, whether it's in transit or at rest.
Cloud-based servers are a pay-as-you go service, so the more services and storage you need, the higher your costs will be. You have no large, unexpected upfront or maintenance costs with cloud-based servers.
And, because the equipment is managed by the provider, you no longer have the costs associated with replacing server hardware every three to five years.
When your server is hosted in the cloud, the third-party cloud provider is responsible for server maintenance.
While many will offer you the opportunity to manage updates, they will automatically install updates if you don’t. This ensures that your server continues to operate efficiently and safely.
Cloud providers also handle cybersecurity risk management. This means that cloud vendors carry insurance that will cover (at least some of) the cost of a data breach.
It's important to note that you should have a solid understanding of the amount of coverage your provider has and whether there are any caps for claims.
Depending on coverage, you may need a supplemental cyber liability insurance policy to fully protect your business.
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With cloud computing, your server is available on demand to all authorized users anytime, from anywhere, using any device.
This is particularly beneficial if you have multiple locations or a remote workforce. It allows your team members to access important files, applications, and other resources on your network from anywhere, as long as they have an internet connection.
Related Article: Top 3 Ways To Secure Your IT Network With A Remote Workforce
In the event of a cyber incident or accidental data loss, you can revert to a recent version of all of your data that is backed up in the cloud and be up and running again quickly.
Below are some of the biggest disadvantages of cloud-based servers.
Although we listed cost as an advantage, two things can be true. Since cloud-based servers are a pay-as-you-go service, the ongoing cost will never go away. What's more, you have no control on a vendor's future subscription price increases.
Despite the powerful security tools we mentioned above, cloud-based servers also carry cybersecurity risks. Those include the potential for a data breach, distributed denial-of-service (DoS) attack, account hijacking, misconfiguration, or other threat.
Some organizations, including financial services companies and defense contractor, are contractually required to use on-premise servers to reduce cyber risks.
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The more people you have accessing your server, the greater the risk of your data being lost or stolen. For added security, make sure your organization uses a reliable cloud provider and that you understand the precautions they take to keep your information safe.
While cloud-based servers can accommodate an unlimited number of users, your accessibility can be limited by insufficient internet bandwidth.
Because cloud servers are processing vast amounts of data, they require high-speed internet connections to prevent frustratingly slow data transfer speeds, buffering, or unresponsiveness.
You also have no control over unplanned disruptions and downtime since your cloud provider manages the maintenance schedule. This could impact your business operations, causing production delays and other headaches. Or, you may need to pay extra to get premium 24-hour, 7-day uptime.
A local (also known as an on-premise, on-site or physical) server uses local hardware to store data and run applications. Local servers are typically hosted on-site at your business location.
Although cloud-based servers are increasingly becoming the option of choice, local servers will likely continue to play a role in manufacturing IT infrastructures. That's because they provide certain distinct advantages over the cloud.
If your business requires custom server configurations to manage your data, it can be easier to implement and manage these customizations in a physical server.
Also, since you're responsible for the maintenance of your local server, you can schedule downtime to perform preventative maintenance as needed.
When you buy a server and host it on-site, you own the equipment. This also helps ensure that you maintain control of your sensitive data.
Housing a server on-site gives many business owners the feeling of increased data privacy and lower risk of data loss. This can be true if the server is routinely monitored for intrusion and maintained regularly.
As with most things in life there are pros and cons to local servers. We address some of the disadvantages below.
Local servers require a significant investment in hardware.
Like having a car, ongoing maintenance, backup, and upgrade costs for your equipment need to be factored in. In addition, since local servers have an average lifespan of three to five years, you'll need to budget for that future capital expense.
In addition, you’ll need to establish secure and reliable backups to ensure business continuity in case of disaster, be it a natural disaster, cyberattack, or human error.
For instance, if a server goes down, will your business be able to continue operating? A backup server means extra hardware and maintenance costs, as well as higher utility expenses.
Related Article: 8 Hidden Cyber Risks That Might Be Lurking Within Your IT Environment
Other affiliated costs include physically securing your server room. Whether that security involves installing a badge reader, mounting securing cameras, or hiring a security guard, there will be additional costs to control physical access to only authorized personnel.
You will need to either use in-house IT staff or hire an external IT service provider for on-site maintenance and upgrades to your local server.
If your internal staff handles these tasks, they will likely have less time to tackle your day-to-day IT issues that pop up or devote to the long-term strategic IT planning that your business needs to achieve your long-term goals.
Local or on-site servers that are housed within your building require sufficient physical space along with adequate temperature controls.
You'll need to assess whether you have the physical capacity to house a local server? If you do, what is the cost per square foot for an on-premises server within your facility?
Physical servers are not as easily scalable as cloud-based servers. For example, seasonal businesses need a server built to accommodate peak business demands.
During the off-season, the server operates at the same level, which means extra utility usage and higher operational costs. And, if business tapers off, you don’t have the option to scale down the size of your server until it is time replace it.
On-premise servers can take two to three weeks to build due to the lead time required for all of the hardware to be delivered and installed. Ongoing maintenance and upkeep will require additional commitments of both time and resources.
To be honest, the best choice for your business depends on many different factors.
Some things to consider are the needs of your business, the size of your internal IT staff, regulatory and contractual requirements, your budget, and whether you are planning a significant expansion anytime soon.
Also, if you've recently invested a lot of money in on-premise servers, then it of course makes sense to hold off on moving to the cloud. To get the most out of your money, wait until your current local server is about six months from the end of life. At that point, you could consider migrating to the cloud.
Keep in mind that it's not necessarily an all or nothing proposition. Many businesses that have migrated to the cloud, have since started to shift to a hybrid cloud infrastructure that uses both local servers and cloud-based servers to get the best of both solutions.
After reading this article, you now have a better understanding of the advantages and disadvantages of local vs. cloud-based servers. If you're still unsure which solution is right for your organization, reach out to us.
Kelser has provided strategic guidance to help many small and medium-sized enterprises like yours develop the right infrastructure and computing resource strategy tailored to their business.
Like many business leaders, you may be concerned whether your cybersecurity tools are up to the latest challenges. Since threats continue to evolve, it is prudent to make sure you have strong defenses in-place.
Kelser provides a full suite of managed IT support services including robust cybersecurity protections.
Not sure about your ability to withstand a cyber attack? You're not alone. Click on the link below to learn five best practices and actions you must take to protect your business. Use this checklist to:
✔️Understand where your organization's cybersecurity policy needs improving
✔️Learn actions you can take to keep your organization's data secure
✔️Help ensure your organization follows the latest cybersecurity best practices