On-Premise vs. Cloud for Enterprise Mobility: The Pros, Cons, and Cost

While the enterprise world is quickly moving to cloud technology, there are still a few reasons on-premise applications may be better for your enterprise. The trick in discovering which option is best for you is to clearly identify the pros and cons of on-premise vs. applications in the cloud.

In the end, which one you choose needs to be a business decision. While there are technical reasons we believe someone should choose cloud over on-premise, the final choice should reflect the needs and purpose of the business app. In this article, we’re going to discuss the pros and cons of both on-premise and cloud applications so you can make a more informed decision on which way you need to go.

On-Premise vs. Could Enterprise Applications: Which is Best?

There are three technical areas to consider when deciding on on-premise vs. Cloud:

1) Availability

On-Premise brings an availability limitation with it, which is only a pro or con depending, again, on your business needs. Some businesses appreciate the locked-down nature of an on-premise app, which can only be available under certain conditions. If you need 24/7 access to your app with 99.9% availability time, cloud technology is your choice. It allows a much broader upside in terms of availability, accessibility, and up-time.

With cloud applications, you can access your information anywhere, at anytime, and the system will rarely be unreachable. With on-premise, however, the system will go offline during weekends and holidays. Again, for some companies, this is perfectly fine because it fits with the way they do business. For others, access to the app only during business hours would be a operations problem.

2) Scalability

The applications demand on system resources is another area that needs to be considered before making a final decision. If your app is internal only, you may not face a scalability problem, as there is an obvious limit to how much strain can be put on the system. However, if the app is consumer facing, there may be unanticipated times where the user load is higher than normal.

For on-premise applications, scalability can be a blocker as you are limited to the infrastructure you have in place. For instance, an on-premise application has access to a finite bandwidth – scaling beyond that isn’t an option.

If you experience heavy user loads on a limited resource, it could be a disaster. Cloud applications, on the other hand, have a virtually unlimited ability to scale as needed. For consumer-facing applications, consider the bandwidth and resource loads carefully before making a decision to go with on-premise over cloud technology.

3) Cost

The cost difference between on-premise and cloud technology can be enormous, especially in up-front cost. Consider how much you want to invest up-font on infrastructure. Would you prefer to spread the high-cost of on-premise infrastructure out into an ongoing cloud subscription?

For the initial setup of on-premise applications, you have to build a solution from scratch, meaning you have to build the infrastructure for square one. You have to secure the hardware, install it, build the network, and all the rest that comes along with it.

All those costs can equate to a hefty startup price. Businesses may not have sufficient funding for building the infrastructure to support their application. The alternative is to invest in the cloud, where hardware and bandwidth costs are ongoing, but much cheaper up-front. In the end, a subscription may even be a money-saver when it comes to technology maintenance as well. Maintaining an on-premise network for the long-term can become a heavy weight on IT budgets.

Which is Better in 2015?

2014 saw a dramatic increase in the utilization of cloud technology in the enterprise space. Cloud technology is slowly taking over as more companies understand the benefits vs. risk of building their applications in the cloud.

The common misconception of the cloud being less secure than on-premise is one area that has slowed the cloud’s ability to take over completely. Many of the companies we talk to want to adopt cloud technology, but their understanding of on-cloud continue to make them hesitant to make the switch.

The truth is, for most companies, security isn’t the issue to consider between cloud and on-premise. For some financial institutions that need a high level of security, or companies in the defense industry that require a certain level of security clearance before someone can access the system, on-premise still makes sense. But for other industries, being on-premise is no more secure than their app would be in the cloud.

CRM Applications and the Cloud

CRM applications are a good example of what should be in the cloud. CRM applications are primarily used by salespeople, who more often than not, are on the road. Having an on-premise solution precludes salespeople from access their CRM when they need it most, which is away from the office, in front of the customer. CRM applications in the cloud, however, give salespeople access to their CRM on any device, regardless of location or time of day.

We’ve seen companies who have a robust CRM in place, but it goes unused by sales, simply because it’s not accessible when they need it most. This results in a sort of franken-system of doing sales rather than utilizing the technology the enterprise has invested in in the first place.

For many salespeople, the drudgery of working with an on-premise CRM is too much for them to be efficient and productive. There are so many steps to login to the VPN, then login to the application, then go through more steps, which is all discouraging to the worker. When a salesperson is in front of a potential customer, they need immediate access to information stored in the CRM app.

The availability and accessibility of the cloud is the reason cloud-based CRM applications are widely used.

More Advantages of Cloud Technology

  • Low-Cost Infrastructure
  • Low-Cost Maintenance
  • Bandwidth Guarantees
  • Power-Outage Mitigation
  • Uptime Guarantees

While some companies will never move from on-premise systems, most companies will find themselves moving to the cloud sooner or later. The benefit of connectivity and lower equipment and maintenance costs are too great not to adopt cloud technology. In the end, however, whether your enterprise should go on-premise vs. cloud should be a business decision based on what works best for your unique needs and requirements.