On-premises vs cloud deployment: can you get the best of both worlds?

on-premise vs cloud

A whopping 85% of businesses will adopt a cloud-first approach by 2025, Gartner predicts. Be that as it may, in 2022 “only” 60% of all corporate data was stored in the cloud.

Legacy applications are alive and kicking, and so is the hype around hybrid cloud solutions, which combine public cloud, private cloud, and on-premises infrastructure into a single, flexible, heterogeneous environment. But is it really possible to reap the benefits of both approaches?

That’s what we’ll be taking a look at in this article, along with the key differences between on-premises software vs cloud computing in terms of security, stability, costs, and more. Plus, how to decide which deployment type is the right choice for your business.

What is on-premises software and what is cloud computing?

“On-premises,” also referred to as “on-prem,” (or, incorrectly, “on-premise”) is a deployment method where software is directly installed and run on computers on the premises of the organization that uses it. By contrast, cloud computing provides on-demand access to computer services and resources, such as applications, servers, storage, analytics, and networking, which are hosted and managed remotely by a cloud service provider. Cloud computing services fall into one of three categories: infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS).

Is the cloud more reliable than on-premises solutions?

There’s no black-and-white answer here. It’s like asking if owning a car or carpooling is more reliable when it comes to traveling to work. If you drive every day and have the means to cover the costs of parking and car maintenance, buying a car makes a lot of sense. If you don’t feel confident at the wheel and only have one meeting per month to get to anyway, carpooling it is. Also, a carpool driver who hits the road on a regular basis probably has more driving experience than you, meaning you can trust them to keep you safe.

On-premises infrastructure vs cloud advantages: a side-by-side comparison

Compared to file servers, cloud computing for companies offers easy scalability as well as improved mobility and collaboration at a fraction of the cost of running an on-premises infrastructure. Yet when it comes to safeguarding their most precious data assets, risk-averse organizations often feel uneasy about handing their data off to a cloud provider, even if it means missing out on significant efficiency gains – not to mention the higher price tag.

But let’s see the pros and cons of each deployment method in detail.


On premises: You’re in charge of your environment and data. If you have adequate manpower with the right skills at your disposal, you can enjoy maximum security and efficiency.
Cloud computing: When you hand over your data assets to a cloud provider, you also give up control over them in terms of safety and data protection compliance.


On premises: Lacking file sharing and collaboration capabilities and inconsistent data availability are some of the biggest disadvantages of on-premises deployment.
Cloud computing: Accessible through virtually any device with an internet connection, files stored in the cloud can be shared and edited by any number of people at once.


On premises: If you’re in the market for applications that are built and configured to suit your exact business needs, the benefits of on-premises deployment are hard to beat.
Cloud computing: More often than not, cloud-based applications come as pre-packaged solutions and can only be tailored for additional fees, if at all.


On premises: For businesses who store sensitive business or personal information about their employees or customers, only the safest – that is, on-premises – environment is safe enough.
Cloud computing: With cloud providers being a honeypot for malicious actors, security remains the biggest question mark over moving to the cloud.


On premises: If set up properly, a local internal network ensures reliable business operations and uninterrupted access to data assets even without internet connection.
Cloud computing: Cloud-based solutions serving as your backup data center can spare your business a major headache in the event of a disaster or other service disruptions.


On premises: File servers not only come with a sizable upfront cost but are also followed by maintenance and replacement utility bills. On top of licensing and upgrade charges.
Cloud computing: Pay-as-you-go pricing models and no required capital expenditure are huge advantages of cloud-based applications.

Cloud vs on-premises security: do we have a winner?

Let’s see how cloud server security and on-premises security compare – a key consideration for any business thinking about taking the jump into the world of cloud services.

Cloud server security

● By nature, cloud providers must keep up with the latest technology innovations, use the latest software versions, and require their customers to sign rigid SLAs.
● Redundant, mirrored data center architectures guarantee that your data is backed up in several locations, thus ensuring business continuity in the face of disruption.
● Compared to individual businesses, cloud providers have a vast knowledge of potential service errors and experience in solving them with speed and efficiency.
● Cloud services are based on virtualization technology, which involves using pre-hardened server images that can be restarted without any hiccups in operation.
● With the micro-segmentation of coherent IT components, cloud hosting providers can create granular secure zones to achieve better visibility and containment of viruses.

On-premises security

● Serving legions of customers all at once, cloud providers and their cargo are a common target of cyberattacks. A small or mid-sized business is less likely to draw this kind of attention from malicious actors.
● In a cloud environment, your data travels from one virtual machine to another across the globe. Data is the most vulnerable when in transit, while on-premises deployment keeps information encrypted and at rest.
● If you have the human and financial resources to build a robust, standardized IT infrastructure, cloud providers will be no match in terms of security. This, however, requires tons of money and effort.

OPEX vs CAPEX: cloud computing vs on-premises cost comparison

Before diving into any kind of cloud vs server cost comparison, it’s important to point out that having an on-premises data center requires capital expenditures (CAPEX), while a cloud service requires operational expenditures (OPEX). Both can get out of hand if the solutions deployed fail to meet your business goals. If done well, however, OPEX can be kept at bay when using cloud services.

In the case of on-premises applications, capital expenditures include the costs of:

● building a site and server rooms with sufficient air conditioning and fire protection as well as security personnel and protocols like access control and monitoring;
● purchasing assets such as server cages, hardware and software, spare parts, cable management tools and licenses as well as hiring in-house IT staff;
● asset maintenance, including insurance fees, upgrade charges, monthly payroll expenses as well as training personnel in charge of data assets; and
● downtime caused by anything from hardware failure and natural disasters to cyberattacks and human error as hidden costs.
Let’s crunch some numbers! Calculating with a 3-year server and 15-year infrastructure amortization period, on-premises server hardware costs will dominate your monthly IT budget at approximately 57%. This is likely to be followed by the cost of power required to operate and cool the servers, which will make up around 31% of the total cost of IT infrastructure.

Scalability: the unparalleled cost benefit of cloud computing

The key difference from an investment perspective between cloud-based and on-premises solutions is the following: by deploying and maintaining on-premises servers, you’re essentially paying upfront for the system use that you think your business will need constantly. In reality, however, infrastructure capacity needs fluctuate throughout the year and even require permanent down- or upscaling over time. This can have a severe impact on the total cost of ownership, or TCO, of on-premises deployment.

In terms of TCO, cloud solutions are almost always more cost-effective because they can better accommodate changes in your workload and business needs. Even with subscription fees and the costs of implementation and employee training factored in. Only paying for what you use, you can say goodbye to hardware and software investment, along with storage, networking, security, electricity, maintenance, staffing, and upgrade expenses. Plus, potential disaster recovery costs.

But wait, there’s more: what is a hybrid cloud?

A hybrid cloud, according to TechTarget’s hybrid cloud definition, is a cloud computing environment that blends on-premises, private cloud, and third-party, public cloud services with orchestration across these platforms. In this scenario, companies “deploy workloads in private IT environments or public clouds and move between them as computing needs and costs change.” This way, enterprises can benefit from enhanced control, flexibility, cost-efficiency, security, and regulatory compliance all at once.

5 questions to ask yourself when choosing deployment types

1. Does your business need to be able to scale up or down system use on demand? Consider both your present situation and your strategic goals.

2. What are the pros and cons of your current IT infrastructure? If you’re not ready to give up the pros, a hybrid approach might be the ideal choice.

3. Do you prefer paying once or paying as you go? On-premises solutions come with a hefty upfront cost, while cloud-based ones can be more expensive over their lifetime.

4. Are you subject to global or local regulations or industry standards in terms of data security? If yes, can your cloud provider prove compliance?

5. What is your cloud vs on-premises TCO? Use TechTarget’s guide to calculating total cost of ownership for cloud deployment to avoid expensive surprises.

On-premises vs cloud: get the best of both worlds with Tresorit

Tresorit offsets one of the biggest drawbacks of cloud storage by protecting your company data with zero-knowledge end-to-end encryption. This technology ensures that no file stored, managed, and shared on our cloud storage and collaboration platform leaves unencrypted. It also means that the encryption keys are accessible only to you and authorized recipients. No one else, not even Tresorit can decrypt and read your documents. The platform comes with advanced reporting and monitoring features that offer transparency and control over your data.

Intrigued? Read on to find out how our cloud storage and collaboration tool helped a global business intelligence and investigations firm put clients’ minds at ease about security.