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Which Cloud is Right for Your Business? On-Prem or In The Cloud

cloudAre you still “cloudy” when it comes to understanding “the Cloud?”  Where does “the Cloud” fit in for meeting your company’s IT needs?

Your business might be served best by applications that are hosted on servers in your office (On-Prem or Private Cloud), or applications that are hosted on another company’s shared servers (Public Cloud), or by a combination of Private and Public (Hybrid Cloud).


On-Prem (short for “On-Premise”) is software that is installed and run on servers that are housed in your company’s building.  It is also called a Private Cloud.  This model requires a designated space in your office – generally a server closet – which is cooled to the ideal temperature, the capital expense of purchasing hardware – recommended every 5 years, the cost of IT support for local system administration, and of course the cost of electricity to run the servers and cool the server room.  While each application only uses about 8% of a server’s resources, if different applications were to be simply installed on the same server they might conflict with each other.  A process called virtualization enables different operating systems and applications to be run on the same server by isolating them on virtual servers, allowing for 80% utilization of the hardware.  Through redundancy, virtualization also enables server maintenance without service interruption as well as automated disaster recovery.  The storage on servers can be scaled to meet the growing needs of data and retention.  On-Prem is the preferred choice for organizations that require customized applications, have fewer locations, are wary of the privacy and security of the Cloud, and that prefer a Capital Expense budget and a perpetual license model.

The Cloud

When people talk about “the Cloud,” they are referring to Public Cloud services.  Software in the cloud, also referred to as Software as a Service (SaaS), is a model in which applications are hosted by an outside company and made available to customers over the Internet.  Platform as a Service (PaaS) is another cloud computing model in which hardware and software tools are delivered over the Internet by the cloud provider.  The third model is Infrastructure as a Service (IaaS) in which hardware, software, servers, and storage are hosted by the third-party provider.  Cloud computing enables small businesses to grow without having to own their own applications and IT infrastructure.  Instead they benefit from the economies of scale made possible by sharing applications made available by a Cloud provider.  Applications are accessed through a web-based portal.  Cloud services have monthly recurring costs, which are typically more cost efficient for small businesses than a large upfront expense, and they can scale up or down with ease.  The downside is that high outbound bandwidth needs (for pulling data out) may make cloud services cost prohibitive.  Also, slow internet connections may lead to a poor user experience.  Another concern about using Cloud services is that if the provider experiences downtime, your company will not be able to access the cloud applications, causing downtime at your own company.  Cloud is the preferred choice for organizations that are willing to use standard out-of-the-box applications, have a highly distributed user base, do not have the expertise to manage their own IT infrastructure, and that prefer a subscription model.

Hybrid Cloud

A Hybrid model enables businesses to benefit from features of both Private and Public Cloud models.  Local servers are used to host some applications On-Prem (such as those that store sensitive data) while other distinct functions are provided through third-party providers in the Cloud (such as those that enable collaboration through file sharing).

At Big Idea Technology, we know that each business has different needs.  Call us to determine the best computing model for your business.