Choosing the Right IT Infrastructure – Cloud vs On-Premises

Diane Harvey
Updated on

Selecting the optimal IT infrastructure is a crucial decision for today’s data-driven businesses seeking to enable growth. With the rise of cloud computing, companies now face the choice between remaining with on-premises systems or making the switch to the cloud. What are the key factors to weigh when determining the right IT infrastructure for your organisation?

Understanding Cloud and On-Premises Models

Choosing between cloud or on-premises IT infrastructure starts with clearly understanding the core characteristics of each model. With on-premises IT, organizations house and operate all hardware such as servers, routers, and data storage arrays in a facility under their full control. This provides localised access and management of systems and data. Personnel must be dedicated to maintaining and supporting on-prem infrastructure.

In contrast, cloud computing involves a service provider hosting needed for computer power, storage, networking, analytics, databases and more in their remote data centres. Organisations access these services on-demand over the internet. This eliminates the need for upfront capital investments in on-site equipment.

Cloud IT infrastructure can scale elastically while on-prem requires expansions and upgrades. However, on-prem offers complete control and privacy while reliance on an outside cloud vendor introduces new dependencies.

When evaluating IT infrastructure decisions, these fundamental differences in control, flexibility, ownership and access underpin many other considerations around performance, security, staffing and budgets. Clearly delineating the core attributes provides context for determining what model best serves an organisation’s needs and priorities.

Clearly Defining Your IT Infrastructure Requirements

The first step in defining your IT infrastructure is detailing your specific needs and priorities when it comes to performance, security, compliance, costs, and capabilities. Key considerations include:

  • Performance Needs: Analyse application and workload requirements under peak loads and future projected usage. Can cloud provide optimal response times and throughput?
  • Security Obligations: Review all compliance mandates and data privacy regulations that apply to your systems and data. Do they allow for cloud hosting? What additional controls are needed?
  • Budget Parameters: Estimate total cost of ownership over a 5-10 year period for each model using projections for growth, staffing, facilities, hardware lifecycles, and more. Set realistic budget guardrails.
  • In-House Expertise: Audit existing IT team skills in areas like data centre operations, network engineering, security, disaster recovery, and emerging tech. Identify any gaps that cloud could potentially fill.
  • SLAs and Reliability: Define minimum service level agreement standards for uptime and performance based on business criticality. Evaluate cloud versus on-prem capabilities.
  • Scalability Needs: Analyse your application architectures and anticipate traffic, storage and data demands over time. Determine scalability expectations.
  • Business Agility: Assess the ability to quickly deploy new apps, tap into innovations, expand collaboration, meet spikes in demand, and enter new markets. Prioritize agility.

Thoroughly detailing every aspect of your ideal IT environment equips you to effectively evaluate options. Including key stakeholders from IT, leadership, finance, operations and more ensures requirements align with enterprise-wide priorities and realities. Match needs to the strengths of each model.

Evaluating Access and Collaboration Needs

The cloud provides innate advantages when it comes to enabling remote working, widespread collaboration, and providing access beyond the boundaries of your office. With on-premises infrastructure, companies often must implement additional mechanisms like VPNs to safely extend private network access to distributed employees and partners.

Complex solutions may be required to facilitate collaboration across global offices and teams as opposed to the cloud’s seamless connectivity. When selecting IT infrastructure, carefully analyse how integral collaboration is to your operations – from internal communication to working with clients and vendors externally. If nimble collaboration at scale is a priority, cloud models provide simpler facilitation versus the extra considerations around access and networking needed for on-premises environments.

Assessing Application and Workload Types

When evaluating cloud and on-premises IT infrastructure, it is crucial to catalogue and assess your organisation’s application portfolio and workloads. Legacy or specialised applications sometimes face compatibility challenges moving to the cloud due to architectural constraints.

However, future roadmap direction is equally important – modern cloud-native apps align well to cloud hosting. For compute and data-intensive workloads like analytics, machine learning, and rendering, the vast on-demand resources of the cloud often proves advantageous versus limited local capabilities.

Not all apps and workloads fit neatly into either model – hybrid approaches combining cloud and on-premises may provide the ideal balance. Conducting a detailed audit provides indispensable insights into current and future workload requirements and how well each environment can support your business needs.

Considering Compliance and Data Regulations

For organisations in heavily regulated industries like finance, healthcare, legal services, and public sector, compliance and data governance obligations should be top priority in any infrastructure evaluation. On-premises hosting may provide reassurance of full physical control and access over sensitive data. Meeting cloud compliance mandates requires expansive due diligence around the provider’s security, access controls, encryption, and transparency reporting. Geographical restrictions around storing certain data outside UK borders may also limit some cloud options. Deep analysis of all relevant regulations coupled with legal consultation is highly advised before making infrastructure decisions impacting regulated data. The cloud introduces extra obligations, but also opportunities to utilize compliance-as-a-service offerings

Planning for Business Agility and Future Growth

The innate agility and scalability of the cloud is a major advantage when it comes to adjusting to evolving business needs and enabling growth. Key considerations around agility include:

  • Spikes in Demand: Cloud IT infrastructure can automatically scale up computer and storage resources to smoothly handle traffic spikes, new product launches, or seasonal peaks. On-prem requires manual scaling.
  • Business Agility: With cloud, organisations can quickly deploy new applications, tap into emerging technologies like AI, and expand collaboration tools to open new opportunities. On-prem makes pivots more difficult.
  • Global Growth: Expanding to new regions or a global footprint is easily achieved with cloud. On-prem requires setting up whole new data centres and IT infrastructure.
  • M&A Activity: Incorporating new divisions or companies is far easier by leveraging the cloud’s flexibility versus complex integrations of on-prem systems and moving physical infrastructure.
  • Time-to-Market: The cloud allows faster deployment of IT infrastructure and apps that fuel strategic initiatives. Lengthy on-prem procurement and set-up slows response to market changes.
  • Business Continuity: The built-in redundancy and geographic coverage of major cloud providers enables strong resilience. On-prem demands heavy investment in backup systems.

Thoroughly analyse your organisation’s growth potential and need for responsiveness when choosing infrastructure. An agile, flexible foundation equips you to capitalise on opportunities. Cloud provides this foresighted platform while on-prem could restrain ambition.

Carefully Evaluating In-House IT Capabilities and Resources

Choosing on-premise IT infrastructure brings with it the need to maintain a robust in-house IT staff to architect, support, optimise, and manage your systems. Key considerations around IT capabilities include:

  • Staffing Levels: Determine if you have adequate IT headcount to handle day-to-day operations, new projects, emergency issues, and initiatives like upgrades and migrations. Short-staffing can lead to vulnerabilities.
  • Expertise: Audit the depth and breadth of knowledge across your IT team when it comes to handling infrastructure management, on-prem data centres, networking, security, disaster recovery, and emerging technologies. Identify any gaps.
  • Support Model: Define what levels of support are needed for hardware, software, infrastructure monitoring, help desk, documentation, and training. Can current resources meet these demands?
  • Financial Resources: Ensure adequate budget not only for salaries but ongoing training, certifications, tools, and resources to keep the team current, effective, and poised for future needs.
  • Scalability: Analyse your capability to efficiently expand IT headcount and skills if the organization sees growth. The lengthy process of hiring and onboarding could create risks.
  • Strategic Alignment: Beyond maintenance, can your IT team actively contribute insights and strategy to propel the business forward rather than just “keeping the lights on”?

The cloud shifts much of the burden of the IT infrastructure management and optimisation to the provider, reducing pressure on internal IT staff. Realistically assessing the strengths and potential gaps within your team’s skills and capacities is essential when determining the optimal infrastructure path. Don’t take this capability for granted.

Performing a Comprehensive Cost Analysis

One of the most important evaluations is projecting and comparing the total cost of ownership for cloud-based infrastructure versus maintaining on-premises systems. Develop detailed estimates that factor in:

  • Hardware Costs: The upfront investment for on-prem servers, routers, switches and storage arrays versus minimal hardware needed for the cloud. Also account for regular hardware refresh cycles.
  • Energy and Facilities: On-going utility and facilities costs for power, cooling, and real estate to house an on-prem data centre. The cloud eliminates most of these expenses.
  • IT Staff: The headcount required to architect, operate, optimise, secure and support on-prem infrastructure versus more optimised staffing enabled by the cloud.
  • Growth Projections: The cloud allows seamless scalability to support business growth. On-prem requires major upgrades and expansions to account for rising needs. Model out expected growth.
  • Migration and Implementation: Potential data migration and application re-platforming costs if moving from on-prem to cloud. Account for professional services if needed.
  • Operating Costs: Regular operating expenses like equipment maintenance, software licensing, and vendor support fees. The cloud shifts most of these to the provider.
  • Business Continuity: Backup, disaster recovery, and redundancy costs differ. The cloud can inherently provide higher resilience.

Carefully scoping out TCO over a 5-10 year timeframe provides the truest comparison. While the cloud has higher operating costs, it eliminates many of the steep capital and facilities expenses required for on-premises infrastructure as well as providing innate scalability. Performing an accurate cost analysis equips you to make the optimal IT infrastructure decision aligned with strategic business goals.

Prioritising Reliability and Performances

Cloud offers built-in redundancy and failover most organisations struggle to match on-premises. And specialised cloud providers can optimise performance far above in-house IT capabilities. Reliability may be the deciding factor for mission-critical systems.

Determining optimal IT infrastructure requires in-depth analysis specific to your workloads, compliance needs, resources, and strategic priorities. While the cloud offers immense advantages in agility and TCO, on-premises retains benefits around control and specialized apps. Carefully weigh the considerations to choose what best propels your organisation forward.

Find the Right Fit for Your Business

Determining the best IT infrastructure to meet your organisation’s unique needs requires careful evaluation of all the factors we’ve discussed. While shifting to the cloud offers agility and cost benefits, existing IT considerations may warrant maintaining on-premises systems.

If you’re looking to determine the optimal IT infrastructure for your business as you grow, we can help. Our technology advisors have deep expertise guiding companies through customised cloud vs on-premises assessments.

Connect with us today to start a conversation about your business goals, infrastructure pain points, and plans for the future. Together, we’ll determine the ideal IT environment to keep your company competitive.

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