Cloud or On-Premise?

Cloud or On-Premise?

Reading Time: 4 minutes11th March 2013 | Modified: 13th January 2023

Categories: CNC News

The last 2 years have seen perhaps the biggest change in how people have viewed their future IT strategy, with the traditional local server/services offerings being reconsidered in favour of solutions in the ‘cloud’ or off-premise.

CNC are keen to embrace new technologies but to also consider them with care to ensure they meet the needs of the businesses intending to use them.

What is cloud?

Cloud is not a specific technology but rather a generic term indicating the solution is not residing on the customers’ own premises or systems.

A couple of examples of cloud solutions are:

• Online banking, this is one familiar to most people and this requires no software to be installed onto your system in order for you to access your bank account details. All transactions are carried out over an Internet connection in a standard web browser.

• Web Mail, products such as Hotmail, Gmail etc. have provided a cloud email solution to end users for many years, Hotmail started in the late 1990’s so nothing’s really new there. Some allow the use of local email software such as Outlook to access the system or any standard web browser.

What are the benefits?

The benefits of moving to an off-premise solution vary tremendously depending upon individual circumstances and the type of service being considered.

Where the system being taken into the cloud does not generally interact with any other systems, either locally or otherwise, this can have less impact but that is not always the case.

The biggest reason given for moving to this technology is a perceived lower cost of ownership and the removal of management of any hardware or software traditionally associated with providing the service locally. One example of this is email, the most common solution that people consider moving.

So let’s compare options, using email as an example:

a. On-Premise Email solution.

This requires a server, some server software, an Internet provider to send the mail to you, local client software, hardware and of course a method of backing up the email.

For large and small businesses the challenges are always the same, sufficient server power and storage to keep pace with the ever increasing demands of users. This is mainly the management of their mail, the ability to recover quickly if the user deletes something and of course, the procurement of software licences to facilitate the service.

b. Off-Premise ‘Cloud’ Solution.

This simply requires the delivery of email by an Internet provider, local email client software such as Outlook or a browser, a device to access from and a cloud provider.

The choice is obvious isn’t it?

At first glance this seems like an obvious choice, the cloud solution means no expensive server hardware, no headache of software licencing but a simple ‘pay monthly’ service per mailbox and off you go.

In fact, it can be like that but in reality, especially when your users are in all different locations in small numbers and access to a server isn’t necessary. But unless you are going to totally eradicate the server hardware and all other local services, it can also prove to be a false economy.

Many companies need to keep a server running for the local storage of files, other programs, perhaps an accounts or ERP package etc as well as other services, sp the hardware and typically the software are already there.

Is there a management headache? Well for most SME’s certainly there isn’t, they generally have a relationship with a local company that does that for them and unless people change, there are no real ongoing management tasks to perform other than backup, but that’s going to be in place anyway for the other data. You still have the management task of adding new and removing old users anyway with both solutions.

What about backup? Well, many cloud providers don’t provide a backup service in the traditional way, they simply guarantee the availability of the platform and offer a large mailbox. Backups are something they rely on the individual user to undertake themselves to local storage. Most people know that users don’t appreciate the risks of data loss, until after they’ve lost it of course, so they are extremely unlikely to do this on a regular basis. Even if they did, it means you have company sensitive data on local hard drives.

I’m going to save money aren’t I?

Then there are the commercial implications, many SME’s run Microsoft’s Small Business Server product that includes Exchange server, so this works out at around £115 per user for a one-off licence purchase that could last for perhaps 4-6 years.

Taking the lowest priced Microsoft Office 365 plan as a comparison, this will cost you £2.60 per month per mailbox. This is direct with Microsoft along with the support via a big call centre with someone who doesn’t understand your business. Many resellers therefore, CNC included, offer their own hosting plans which include a more personal support offering.

For a typical SME of say 15 users, the costs over a 5 year period, purely of software / hosting would be £1,725 for on-premise and £2,340 for cloud. Now consider that with 15 users, it’s highly likely that you’ll have that server anyway.

Then there’s the biggest question that everyone faces, will it be faster or slower? Well, around the country the speed of Internet access is a lottery based on location, quality of lines and availability of providers. Again, using the 15 users as a guide, with on-premise, all emails sent internally don’t go outside the server, but with hosted, every email sent or received, even to the person sitting next to you goes out to the internet and back in again. Will people who are used to sending large email attachments without a thought for the implications really change their habits?


As with all emerging technologies, the adoption of cloud will be fast by some and slower by others but eventually every business will adopt it in some way or another. I think that it will take a significant change in the availability of fast, reliable Internet connections for many businesses to really embrace it however along with better commercial options making it a simple, obvious direction to take.

So, ignore the hype, the buzzword salesman whose business has sprung up purely to sell this new technology and who will be selling the next great thing next week. Instead talk to the person who understands all of the options and who you can trust to give you the best advice, your reseller, hopefully CNC.

Categorized as CNC News

By Gary

Gary has always focused on making sure the most appropriate solution is provided to help customers, not just what's new and shiny. With over 30 years in the IT industry Gary has the experience to tell the difference between something that's game-changing or is just a passing fad!