The cost of maintaining On-prem Servers vs Cloud Storage

In today’s rapidly evolving digital landscape, technology plays a pivotal role in supporting business operations. Two prominent methods of infrastructure management, namely server infrastructure and cloud computing, have emerged as game-changers in the industry.

Server infrastructure entails the traditional model of hosting and managing physical servers within your business premises. This approach involves substantial investments in server hardware, software, and network infrastructure to facilitate data storage, application hosting, and other computing requirements.

On the other hand, cloud computing presents a paradigm shift in infrastructure management. It leverages remote servers and virtualisation technologies to deliver scalable and on-demand computing resources via the Internet. Renowned cloud service providers such as Microsoft Azure, Amazon Web Services, and Google Cloud Platform offer a range of services, including infrastructure, platforms, and software, allowing businesses to access and utilise resources tailored to their specific needs.

With an increasing number of businesses transitioning to the cloud, you might be contemplating whether migrating your IT system from traditional in-house servers to a cloud-based alternative is the right move for your organisation. As with any strategic business decision, it is crucial to carefully evaluate the advantages and disadvantages of both options before making an informed and well-considered choice.

At Vantage 365, we are committed to understanding your business and assisting you in making the optimal decision that aligns with your operational and financial goals.

In this blog post, we will delve deeper into the benefits and key factors you should take into account when determining the most suitable approach to infrastructure management – whether it’s server infrastructure or cloud computing.

Pros and cons of on-premise servers

Traditionally, on-premise servers have been a popular choice, offering users complete control over their infrastructure. With on-premise servers, you have the flexibility to customise hardware configurations, network setups, and security measures to meet your specific requirements. This level of control extends to data security, as you can implement your own security protocols, encryption standards, and access controls to safeguard sensitive information. Moreover, on-premise servers provide excellent performance and low latency since the infrastructure is located within your premises, making them ideal for high-speed processing and real-time data access applications.

For industries with stringent compliance regulations, on-premise servers offer better control and assurance when it comes to meeting these requirements. While the upfront costs for on-premise servers may be higher, they can prove to be more cost-effective in the long run, especially for businesses with stable and predictable workloads. The total cost of ownership (TCO) over several years can often be lower than ongoing cloud service subscription fees.

However, it’s important to consider the challenges associated with implementing on-premise servers. Significant upfront investment in hardware, software licenses, and infrastructure setup is required, which can pose a financial burden, particularly for small businesses or start-ups with limited budgets. Ongoing maintenance, updates, and management also demand dedicated resources, including IT staff and expertise, to handle tasks such as hardware repairs, software upgrades, and troubleshooting.

Scaling on-premise servers can be challenging and time-consuming. If your business experiences sudden workload spikes or requires additional resources, upgrading the infrastructure accordingly may involve significant lead time and investment. Additionally, you are responsible for implementing your own disaster recovery solutions, including backup systems, redundancy measures, and offsite storage, which can add complexity and cost to your overall infrastructure setup.

Compared to cloud solutions, on-premise servers offer limited flexibility. Scaling resources, accessing data remotely, or quickly adapting to changing business needs may require additional investments or modifications to your existing infrastructure. It’s crucial to carefully weigh these factors when considering on-premise servers as part of your infrastructure strategy.

Pros and cons of a cloud-based system

Cloud systems offer unparalleled versatility in modern technology. One of their key advantages is the absence of any initial investment in hardware. Instead, you only pay for the resources you use through a monthly subscription fee. This scalable nature allows for rapid expansion or fluctuations in demand without causing any disruptions. With the ability to swiftly scale up or down, you can seamlessly handle seasonal peaks, accommodate sudden traffic spikes, and scale resources as your business grows.

Cloud service providers typically offer robust infrastructure and redundancy measures, ensuring high availability and minimal downtime. Through multiple data centres distributed across different regions, automatic failover, and uninterrupted continuity are ensured in the event of hardware failures or outages. This guarantees that your applications and data remain accessible to users whenever and wherever they are needed. The flexibility provided by cloud systems fosters remote work, collaboration, and resource accessibility across various locations. Employees can work seamlessly, access data, and collaborate in real-time, leading to enhanced productivity and efficient remote operations.

In addition, cloud service providers typically offer robust infrastructure and redundancy measures, ensuring high availability and minimal downtime. Through multiple data centres distributed across different regions, automatic failover and uninterrupted continuity are ensured in the event of hardware failures or outages. This guarantees that your applications and data remain accessible to users whenever and wherever they are needed. The flexibility provided by cloud systems fosters remote work, collaboration, and resource accessibility across various locations. Employees can work seamlessly, access data, and collaborate in real-time, leading to enhanced productivity and efficient remote operations.

Despite the numerous advantages, cloud-based servers are dependent on internet connectivity for access and operation. Issues with your internet connection can disrupt server access and impact business operations. It’s advisable to have backup connectivity options or contingency plans in place to mitigate such risks. While cloud service providers strive to offer high availability, occasional downtime can still occur, potentially affecting data and application access and resulting in temporary disruptions to productivity.

While cloud computing offers flexibility and cost benefits in many scenarios, expenses can accumulate over time, particularly for businesses with high data storage or compute requirements. Depending on resource usage and pricing models, monthly or annual expenses for cloud services can become significant. Monitoring and optimising cloud usage play a crucial role in preventing costs from escalating.

Finally, it’s worth noting that cloud-based servers may provide limited control over hardware and infrastructure configurations compared to on-premise servers. Customising the underlying infrastructure to meet specific requirements may have restrictions, requiring reliance on the cloud provider’s prescribed configurations.

The security myth

When it comes to choosing between a cloud and on-premises infrastructure, security is a significant factor that often arises. Contrary to common intuition, studies have consistently shown that the public cloud is not only secure but often surpasses the security measures implemented by individual companies. Let’s explore why.

Consider a scenario where an online retailer experiences a security breach and inadvertently exposes customer information. While this may be embarrassing and result in fines, the retailer can still continue their business operations. However, if a public cloud vendor were to suffer a severe breach, it could potentially spell the end of the company. This understanding drives cloud vendors to prioritise security at an exceptionally high level. In fact, they often employ a large number of security experts, surpassing what an individual company may have at their disposal.

Despite having firewalls and intrusion detection software in place, most corporate networks are inherently more vulnerable to attacks compared to leading cloud providers. The statistics consistently support this claim. Trustworthy cloud providers benefit from economies of scale when it comes to security. Their data centres are under constant 24/7 surveillance, staffed by dedicated operations teams and security professionals. Additionally, they constantly implement state-of-the-art cybersecurity technologies.

This means that properly configured cloud environments tend to provide businesses with a level of security that surpasses what can be achieved with an equivalent budget for an on-premises solution. The robust security measures, constant monitoring, and access to cutting-edge technology in cloud environments create a secure foundation for businesses to operate and protect their valuable data.

Therefore, when considering security as a crucial factor in choosing between cloud and on-premises infrastructure, it is important to recognise the exceptional security advantages that cloud solutions can offer. By leveraging the expertise, scale, and advanced security measures provided by leading cloud providers, businesses can ensure a level of security that goes beyond what they could achieve on their own.

Periodic upgrades

When considering the true cost of on-premises infrastructure, many individuals overlook a crucial factor: the need for replacement in the future. It’s important to recognise that most on-premises equipment will require replacement within a five-year timeframe. However, migrating a large volume of data to new equipment can be a daunting task that consumes months of effort and carries inherent risks.

The decision made today regarding infrastructure can have significant repercussions five years down the line. This becomes even more complex when considering that organisations often need to add capacity each year, making a seamless transition to the cloud nearly impossible. These subsequent investments, coupled with the risk of obsolescence during the server’s lifespan and the eventual need for replacement, further compound the capital expenditure (CapEx) burden.

To navigate this challenge, businesses must consider the long-term implications and costs associated with on-premises infrastructure. The expenses involved in data migration, ongoing capacity additions, and the potential risks of hardware obsolescence should all be factored into the decision-making process.

By contrast, cloud solutions offer a distinct advantage in terms of scalability and agility. With cloud services, there is no need to worry about hardware replacement or data migration. Cloud providers handle infrastructure maintenance and upgrades, ensuring that businesses always have access to the latest technologies and capabilities. This eliminates the need for large upfront investments and minimises the risk of obsolescence.

Furthermore, the operational expenses (OpEx) associated with cloud solutions can provide a more predictable and manageable cost structure. Rather than dealing with the upfront costs and ongoing maintenance of on-premises infrastructure, businesses can leverage pay-as-you-go models and scale resources as needed. This flexibility allows organisations to align their infrastructure costs with actual usage and adapt to changing business requirements more efficiently.

In summary, while on-premises infrastructure may initially appear cost-effective, it’s crucial to consider the long-term implications and complexities associated with data migration, capacity additions, and hardware obsolescence. Cloud solutions offer a more scalable and agile alternative, eliminating the need for future replacements and providing a predictable OpEx model. By carefully evaluating the total cost of ownership and considering the benefits of cloud technology, businesses can make informed decisions that align with their long-term goals and minimize the financial burden.

Flexibility and remote working

The need for flexible access to workplace servers has become increasingly significant, especially in 2020 with the widespread shift to remote work. This transition has highlighted the challenges of configuring on-premises servers for flexible access due to networking limitations and security concerns. In many cases, on-premises solutions restrict users from accessing data and services only within the local network, requiring them to be physically present at their workplace or rely on complex and costly virtual private networks (VPNs).

Cloud vendors, on the other hand, specialise in facilitating remote access. Their networks, security measures, and hardware infrastructure are purpose-built to enable seamless remote access. Cloud service providers invest substantial resources in designing networks that can be accessed from anywhere. Instead of each organisation attempting to create their own remote access capabilities, it makes more sense to leverage a technology platform specifically designed for remote work from the outset.

By adopting cloud solutions, businesses gain the advantage of a robust infrastructure tailored for remote access. Cloud service providers have already addressed the challenges associated with remote work, offering secure and scalable environments accessible from any location. This eliminates the need for organisations to invest significant time and money into developing their own remote access infrastructure.

Cloud platforms provide a range of features and tools that facilitate remote collaboration, including secure file sharing, real-time document editing, and seamless communication channels. These capabilities enable teams to work effectively together regardless of their physical location. Additionally, cloud solutions often integrate with popular productivity tools, further enhancing remote work capabilities and streamlining workflows.

The inherent flexibility and scalability of cloud technology make it an ideal choice for organisations embracing remote work. Whether employees are working from home, on the go, or in different office locations, they can access the required data and applications effortlessly. This level of accessibility promotes productivity, collaboration, and agility, ultimately driving business success.

Is there a long-term role for on-premises hardware?

Indeed, in the realm of technology, there will always be unique scenarios that warrant special consideration. Extreme performance requirements or strict compliance regulations often give rise to these exceptional cases. For instance, video editing necessitates lightning-fast storage, high-performance GPUs, and minimal latency between the two. Similarly, image recognition tasks may demand dedicated hardware due to the sheer magnitude of data involved. As we move forward, it is likely that a hybrid approach, combining the strengths of various solutions, will prevail, ensuring the best possible outcomes in different scenarios.

Invest in the cloud today

We have spent time comparing the two systems, and our general recommendation is that cloud-based systems are better for most companies, both financially and operationally. The vast initial investment needed for on-premise servers more than outweighs any benefits from the system. The flexible monthly subscription costs of a cloud-based system make it a far more financially sensible decision. Often, it’s prudent to develop a hybrid system so you can begin to transfer from a traditional on-site server setup to a cloud-based system.

Many companies have invested heavily in their servers, and it’s sensible to continue using these until they cause problems or need replacing. Planning allows for a smooth and non-disruptive transition for your business and ensures continuity.


Here at Vantage 365, we work with businesses of different sizes across various industries to provide practical and affordable solutions to your business problems. We research the latest systems and software so that our advice is balanced and considered. We pride ourselves on the high quality of service we provide to all our clients, building and maintaining long-lasting client relationships due to the consistent quality of support and advice we offer. If your servers are due for replacement, or you are looking at creating a hybrid system to allow for remote working potential, then why not speak to us today? Our friendly and informed team here at Vantage 365 are always happy to discuss your business.

Call us on 01384 593720 or email us at and transform your business today.

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