On-premise vs. cloud: differences and similarities

On-premise vs. cloud cover

When organizing a modern workplace’s IT setup, a decision must be made on whether it should be hosted locally or on an external server. There are many factors to consider before making a move.

Migration to the cloud solutions helps address many modern issues, while legacy hardware and on-premises applications could be the only viable option for others. This article will discuss the key differences and similarities between these two approaches to help you find the best solution for your business case.

What is on-premise infrastructure?

On-premise model is a traditional method of IT asset management when all the resources are held in-house. In these cases, software, hardware, and infrastructure are used and held in the organization’s physical office.

As everything is running from the confines of your organization, your network administrators have full control of the infrastructure. No third parties are involved, which allows tight security mechanisms to keep the data confidential.

Advantages of on-premise software

The biggest advantage of the on-premise model is greater security that stems from the sole ownership of the IT assets. The data doesn’t leave your ecosystem as there are no third parties. If your company is subject to regulatory compliance requirements, this can be a strong plus as you won’t have to worry whether your partner meets the requirements.

Another benefit is that you’re more independent from internet interruptions. You can always access and retrieve data manually, as everything is hosted locally. This would be impossible with cloud setups.

Disadvantages of on-premise software

Keeping everything locally isn’t without downsides. First of all, the maintenance of the whole system falls on your network administrators occupying their work time. They will have to perform data backups and schedule updates for used programs.

The second major flaw is that as you rely on physical hardware, you’ll have to ensure that your infrastructure can handle your workload. You might need to upgrade your server stack constantly. If your demand grows or shrinks, you could be paying for server hardware that you’re not even using to full capacity or straining the infrastructure due to the high number of users — it will be hard to balance out.

What is cloud computing?

Cloud computing means relying on a third-party provider to host all your data. In this case, a third-party provider is a direct supervisor of your infrastructure maintenance, while businesses only pay a subscription fee for the resources they use.

The used server hardware components reside in the provider’s data center, which means the responsibility for data backups and maintenance falls on them. This frees up businesses and helps them to have better flexibility when upscaling or downscaling their operations. The service itself is delivered via the internet and is accessible only remotely.

Advantages of cloud computing

One of the biggest advantages of cloud computing services is their instant provisioning. Third-party providers already have servers configured and ready to be used. Therefore the whole deployment process is very short. Hardware requirements are also eliminated as your business receives everything as a service, so almost no processing is required on the user’s devices.

Cost-wise it’s also much more economical to turn to a cloud provider, as they free up your IT administrator’s workload by taking on maintenance and supervision. Public cloud software updates can be pushed instantly, which creates a leaner and more effective setup. Not to mention that enterprises only pay for what they’re using, maximizing the value-to-cost ratio.

Employees aren’t tied with on-premises workstations and can access their work resources remotely. They only need an internet connection, and their data can be accessed anytime from any part of the world.

Disadvantages of cloud computing

That said, cloud computing has its fair share of disadvantages. One of the main ones is that this ties your company with the provider. Therefore, if your cloud provider has difficulties managing traffic loads, this could affect your business, leaving you no other option but to wait for it to be resolved.

Another problem with cloud computing is its reliance on the internet as the sole service delivery method. If the internet connection is interrupted, you could get cut off from your work resources. This is something that the hackers could also take advantage of when looking into ways to disrupt your business operations.

Finally, if your company is subject to various data directives, this means developing various procedures to ensure that your provider is also taking steps to comply. Failure of your providers to stay in check with the requirements will be shared with your company while it has no real control to affect its actions.

Main differences between on-premise and cloud

As you’ve seen from the examples, on-premises and cloud computing provide different strategies to manage core IT infrastructure. While both approaches aim to solve the same business issues, their methods fundamentally differ.

Upfront cost

On-premise: you’ll have to use in-house dedicated servers, which means you’ll also have to buy and set them up. This also entails figuring out the best place for their storage, considering physical security measures, purchasing software licensing, and outlining maintenance plans.

Cloud: simply put, cloud infrastructure has no upfront costs — you’re only paying for what you’re using. Investing in the maintenance team is unnecessary as all these expenses will most likely be included in the cloud provider’s contract.


On-premise: no external or third-party providers have access to your confidential data is a big plus security-wise. It’s usually better when various regulatory compliance requirements apply to your company.

Cloud: Although only the third-party provider and your company can access the data on paper, the reality might be different. The maintenance of your company’s security in the cloud falls on the provider completely. In such cases, it’s always easier to overlook something when you have additional clients lined up.


On-premise: since you’re dealing with physical servers, flexibility will be very limited. Upscaling your setup as your organization grows would mean additional server racks and figuring out physical storage possibilities. This may also be a bottleneck as your infrastructure might not keep up with the demand from your customers.

Cloud: within a cloud environment, scalability is as easy as flicking a switch. You can align with the cloud service provider to allocate more servers if you need more. Even if you need to shrink your operations, it will be easier, and you’ll likely pay less for your subscription. To top it off, this switch only takes a few moments, so it’s easy to complete this transition and move on with business operations.

Required involvement

On-premise: not only will you need to have in-house staff to deploy everything, but the infrastructure will also require periodic maintenance. Your staff must be experts in their field to set up everything correctly. Therefore not only will you have to deal with the procurement of server hardware, but you’ll also need a technical team available 24/7 to respond to emergencies.

Cloud: as the burden of setup and maintenance is passed on to the third-party provider. There’s little involvement required from the client’s side. You don’t have to maintain an active technical team focused solely on maintenance. In addition, your technical department can focus on various other business areas as infrastructure is managed externally.

Bandwidth performance

On-premise: if you want to improve bandwidth from your local servers, you’ll need to look into upgrades for existing ones or buy additional units. If your remote employees want to connect to your servers, they may experience slowdowns due to the single point of presence on the network.

Cloud: if you’re unsatisfied with the bandwidth, you may work with your provider to rent higher-performance servers. In addition, if your provider oversees multiple data centers, it can likely offer you multiple points of presence to connect to, making your connections flow easier.

Damage control

On-premise: critical system failures and data breaches are possible for any system; in this case, the responsibility rests solely on your part. Another challenge is data recovery, especially if your local backup options only mirror data from one server to another. That way, malware could wipe out your total database.

Cloud: the key difference is that cloud infrastructure heavily relies on a virtual environment. This means that data can be recovered from virtualizations instantly, so it provides more options. On the flip side, there could be various gaps in the data center management system, which the hackers could also exploit, so there’s no option without flaws.

Similarities between on-premise and cloud

If we look at both options from the functionality perspective, both address the same business needs. They even go as far as having some similarities.

Workload distribution

On-premise setup is really a private cloud. Workloads can be distributed using private and public infrastructure with minimal performance loss. While on-premise infrastructure lacks on-demand service availability and is slower regarding database changes, it can perform the same cloud-computing functionalities. An on-premises setup is a good place to test workloads before migrating them to the cloud solutions.

Identical foundations

Structurally, servers in on-premise setups and cloud infrastructure are composed of the same components. You’ll find the operating system and application programming interfaces in both cases. Therefore the difference is just the scale and access method. Cloud servers will only have a management platform as an access mediator.


Some good practices from cloud infrastructures are passed down to on-premises setups. One of them would be virtual machines — they significantly contribute when facilitating data center management. However, as most network administrators have found, they can also be applied on-premises to separate workloads and better manage what’s happening on the server.


Repetitive tasks are the bread and butter of IT network administrators. Therefore, they rely on a handful of automation tools to make server management easier and their work easier. This is common for both on-premises and cloud options, as it makes workload deployments much easier and more effective.

On-premise vs. cloud - how to choose the right one?

While both options have their strengths and weaknesses, the best approach for your company can depend on several factors. For instance, if you have already invested funds into setting up an in-house server stack, it wouldn’t make too much sense to discard it and go with the cloud solutions. You have to evaluate your strengths and weaknesses critically.

On the other hand, if you’re a startup and are highly focused on growth, then in that case cloud approach would be a much better starting point. That way, you can maximize the ratio between the money spent and the value gained. Plus, instant deployment time would also be very beneficial.

However, if your businesses are subject to large amounts of confidential data, you should consider all the options. Ensuring compliance with local laws can be difficult, so don’t risk one of your most important assets. Don’t forget that using hybrid cloud options is also a viable strategy.

How can NordLayer help?

NordLayer provides tools for better data security within the Secure Service Edge framework. It provides site-to-site capabilities extending your network and creating a channel to deliver network security point solutions.

Our adaptive network security solution easily integrates with your existing cloud and on-premises infrastructure, helping to achieve greater security and data privacy and facilitate remote working. NordLayer is an active collaborator when tackling modern cybersecurity issues burdening businesses.

Get in touch with our team and discover the easy route to increase your cloud data security wherever you’re hosting it.

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