Cloud vs. on-premise: cost differences

cloud vs. on-premise

Is cost a key driver in your IT decision making process?

As with most business decisions, cost is inevitably a key consideration when choosing between different solutions. When it comes to your IT infrastructure, understanding the cost difference between cloud vs. on-premise IT solutions is an important factor.

Here we look at the different costs involved in storing data, and compare cloud storage with on-premise servers.

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Cost differences between cloud vs. on-premise servers

Start up costs

It is clearly cheaper to opt for cloud storage over on-premise servers when considering start up costs. The cost of hardware, server room and power needed to implement on-premise storage is far greater than signing up to a cloud solution. Labour costs should also be factored in, setting up a new server and integrating it with your existing IT needs resources.

Cloud storage is a clear winner if you’re starting from scratch.

Maintenance costs

Cloud providers are responsible for all upgrades, patching and other maintenance. You’re responsible for your on-premise servers. While your monthly cloud subscription fee pays for maintenance, as cloud providers use a shared service business model long term it’s a fraction of the cost of maintaining on-premise IT hardware. Day-to-day running costs for on-premise servers are mostly confined to power usage, however regular upgrades are needed to ensure optimal performance and therefore you need to factor in labour costs. Whether this is done by someone in-house, or an external IT technician, these costs add up considerably.

Over time cloud storage is cheaper than on-premise.

Security costs

As with general maintenance, cloud providers are also responsible for implementing and maintaining appropriate security tools. Although it is your organisation’s responsibility for ensuring that data is protected, stored and managed in a compliant way. As well as the cloud provider’s your business may also need to implement security solutions which might range from basic security best practices to additional tools. On-premise servers are your responsibility to protect and ensure that security tools are fit for purpose.

Cloud storage providers include IT security tools which may reduce overall costs.

Cost of storage

Here’s how cloud providers make their money. They charge for storage. While they’ll probably give away some free storage, many will offer between 5GB to 15GB free, many organisations need a lot more than that.

On-premise servers are effectively free.