June 16, 2022

On-site vs cloud computing: Which is better for your business?

Is cloud computing better than on-site computing? Should all businesses adopt cloud computing? The on-site vs cloud computing debate has left many business leaders wondering which one is better for their business.

For a long time, on-site computing was the only thing that was available but now, cloud computing is rapidly reshaping global business networks. Trusting the familiar, business leaders and Chief Information Officers (CIOs) may feel that on-premises corporate computing is a more reliable and cost effective solution but this perception is starting to change.

Cloud has started to outperform on-site computing in a number of ways, from cost to performance. SEACOM Business offers a range of cloud services for multinational corporations and small-to-medium-sized enterprises (SMEs) in South Africa.

The cost of on-site computing

Some CIOs are put off by the cost of migrating to the cloud. If the business has already invested heavily in on-site computing, there may be doubts as to whether cloud adoption makes financial sense. To evaluate this, let’s consider the costs associated with on-site computing.

Having on-premise hardware that is fully owned and managed by a business incurs high operational costs. Purchasing physical hardware is not a once-off cost. Servers or other networking equipment need to be replaced when damaged or outdated. Hardware needs to be stored somewhere, so the business has to rent or own a space to house its on-site data centre.

Data centres consume a lot of energy, both to run the hardware and also for cooling systems. Electricity and backup generators are costly, and businesses also need to consider the cost of power supply equipment.

Hardware requires regular maintenance so businesses need to employ and retain professionals who can do this. Data recovery systems and cyber security also need to be factored in. In-house teams need to have the technical know-how and also include the necessary software in the IT budget.

Comparing the cost of on-site vs cloud computing

Unlike on-site computing, cloud-based solutions do not require businesses to buy physical hardware or have physical storage space. Cloud software is automatically updated, so there is no need to worry about having out-of-date hardware or software. While physical hardware can get damaged or stolen, cloud networks connect to data centres that are extremely secure. Businesses generally cannot afford the levels of security that are implemented by third-party data centres.

Inexpensive deployment and a pay-per-use pricing structure means that businesses can save on costs. Capital expenditure is reduced as no specialised hardware or software is required. Through a partnership with SEACOM Business, companies do not need to have highly specialised IT teams to manage their network.

The benefits of cloud computing

With cloud computing, businesses can benefit from global threat intelligence. Cyber security is always changing, so having a dynamic cyber security solution is essential to keep business data and networks secure. A key concern for CIOs is that cloud computing isn’t secure enough for highly confidential business data. For industries such as banking or healthcare, where corporate data needs to be kept extremely secure, enterprises can use a private cloud or opt for a hybrid cloud environment to maintain maximum cyber security.

The cloud offers an all-in-one computing solution. SEACOM Business offers burstable capacity, meaning that as businesses scale, they never need to worry about running out of storage space and increases in data traffic will be easily catered for. Pay-per-use pricing gives businesses predictable IT expenses that change as the business grows. There is no need to purchase new servers or rent on-premises data centres as digital operations scale up.

On-site vs cloud computing for business

Is cloud computing the solution for any business? The answer to that depends on how digitally focused that business is. Let’s examine a few examples:

Company A is a small manufacturer of wooden toys. This business has no plans to expand anytime soon and all sales happen offline in stores and markets. They are not heavily reliant on tech at the moment for marketing or production. In this case, cloud computing doesn’t seem relevant at all.

Let’s imagine this business a few years down the line. It receives a massive investment and decides to include internet-enabled technologies to automate its production process with 3D printing and robotic assembly. They are starting to push their e-commerce presence and expand globally. Since they don’t already have on-premises servers or a specialised IT team, a cloud-first approach makes a lot of sense.

Let’s consider another example; a fictitious Company B. This is a medium-sized fintech company that has remote teams and their own data centre. Innovation is a core value for this company but on-site computing is slowing down the process. Online collaboration is sluggish and they need to upgrade their servers to process data at higher speeds.

Company B needs to support remote collaboration, improve automated processes and reduce the time-to-market with data-driven insights. For this business, cloud migration is a sensible and necessary choice.

Does my business need cloud computing?

There are a few questions to ask that can help you evaluate on-site vs cloud computing:

  • Are your employees working remotely? Do they need access to company resources from wherever they are?
  • Are you looking to scale up your digital presence?
  • Do you need to upgrade your on-site servers and networks soon?
  • Can your in-house personnel deal with your IT requirements? Would you save money through a B2B partnership?
  • Is your corporate strategy and decision-making informed by data-analytics? Can your on-premises network process big data at a high speed?

On-premises computing is slowly being phased out and replaced by virtualised networks. Businesses that are looking for a long-term computing solution should consider a cloud-first approach to computing. Unless your business doesn’t plan to digitally transform, then the cloud is probably the best choice for your business. For more information or to get a quote for our various cloud services, email us at marketing@seacom.com or leave us a message.


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