On-Prem Data Center vs Cloud: Which suits your organization?

On-Prem Data Center vs Cloud: Which suits your organization?
It is not always that one solution fits every organization’s need especially when it comes to IT Infra. Hence, the choice is in the hands of organizations to decide on the use of on-prem data center and cloud-based on their privacy & control needs. Below are some of the characteristics that drive the above decision of making a choice between OnPrem data center & cloud.

Workload Characteristics: On-demand vs Predictive workloads

Workload characterization is used to predict resource requirements for the future that can help in capacity planning and resource provisioning effectively. An organization with limited capacity and has more of predicted workloads can utilize on-prem data center whereas a cloud data system potentially offers unlimited capacity which can be scaled up/down based on the organizations’ dynamic & on-demand workload requirements. It offers fractional consumption models which help in the easy addition/removal of additional nodes to the cluster by eliminating infrastructure silos and difficulty in data migrations.

Scale of Economics

Cloud providers purchase computing resources in larger quantities at lower costs thus utilizing the economics of scale. When organizations utilize these cloud provider’s shared resources, they can save big CAPEX and pay for resources they use with feasibility to scale up or down as per needs. Since there is no physical setup, IT teams can unlock extra benefits through operational savings with reduced complexities. Beyond economic benefits, businesses can meet goals with greater speed and agility by quickly deploying applications, increasing storage & computing needs on-demand that leads to business growth in terms of revenue as well as market innovation. Having said, consuming cloud for long-term basis is costly compared to having the environment OnPrem.


Businesses are delegating their critical data to third-party data centers in the cloud. It is in the hands of cloud providers to ensure security accreditations. The convenient factor of cloud is its data is accessible with proper credentials from anywhere by anyone with an internet connection, but it also expands the access points that also needs to be protected to ensure safety & security of data while transmitting.
While onprem data center is physically located in an enterprise’s local network making it easy to ensure that only limited people with approved licenses & devices can access the data center. They will have complete control over your data & hardware which gives a higher level of privacy and safety to an extent.

Compliance and Regulatory Requirements

Key issues with compliance requirements are: what types of data are stored by the organization? and where it is getting stored? Businesses running their in-house servers, storage, and archive systems will be able to identify the location of most of their data all the time. Also, they can easily specify the location of data centers, restricted to a particular geography.
But moving IT workloads to external locations of cloud providers create new challenges as they host data in multiple locations to build resilience. Organizations must realize that no matter what way they host their data either in-house IT or cloud, they cannot outsource the compliance responsibility of their data.

Legacy Applications

Organizations retain their old, monolithic systems built on outdated technology as they are critical to corresponding business operations. Scalability, customizable, convenience and remote access are reasons for businesses to shift to cloud. But without a proper legacy systems cloud transformation strategy, all efforts go in vain. Few popular transformation strategies along these lines are Re-host, Re-platform, Re-purchase, Re-factor, Retire and Retain. Although sometimes, legacy applications are tied to the hardware they run and hence it is very difficult to move them to cloud and those workloads are best to run in OnPrem unless they are made portable to Cloud.


OnPrem environments attract big CAPEX investments, whereas cloud service provider gives pay per use consumption model, which is best suited for Startups and Small & Medium enterprises.

Highlights of the above discussion

OnPrem Data Center Cloud
Advantages Have complete control over hardware & data.
High level of privacy & security to an extent as located in-house.
Up-front costs are low.
Scalable resources as per need.
Faster implementation.
Remote access.
Automatically updated.
Disadvantages Occupies huge space with power & cooling facilities.
Scaling up can be time-consuming or end up having more underutilized resources.
Need a dedicated team of IT experts to maintain & manage.
Infrastructure updates are not automatic and rely on internal team.
Less control over the hardware and data.
Services and related cost structures are hard to understand.
Privacy can be a problem and security rely on the cloud provider.
To conclude, there is no one right choice in general for all organizations. It depends on your business needs, budget, in-house team capacity to handle an on prem data center. In general, datacenter is best for smaller organizations which already invested heavily in IT investment, for organization that needs to be extremely careful about data privacy, and for extensive large organizations who requires complete control over data & infrastructure. While cloud can be a best fit for start-ups or small businesses or any organization with limited resources and capital investments, also for large organizations with existing IT infrastructure who also want to enjoy benefits of cloud.
For more information on Data Center and Cloud.
Talk to our experts sales@sbainfo.in on how we can help you decide on the best solution for your organization and support you in planning, implementing, managing your solution.
Written by
Viswanathan N
Viswa is the head of Service and delivery and is responsible for Managing and growing the practice and delivery functions at SBA. With over 20+ years of experience as IT technical, service delivery & solution architect, Viswa’s primary focus is creating a good customer experience by increasing their perceived value in terms of products or services availed from SBA.
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