On-Premises Data Centers vs. Cloud Computing

What is On-Premises Data Centers vs. Cloud Computing?

On-premises data centers, commonly referred to as “on-prem,” allow you to have full control of your infrastructure, while cloud computing is cost-efficient and easy to scale up and down.

On-Premises Computing


A. Infrastructure and Setup


  • On-Premises Infrastructure Overview:

On-premises computing refers to setting up and maintaining your own IT infrastructure within your organization's physical premises.

  • Capital Expenditure (CapEx) and Hardware Costs:

On-premises entails initial investments in hardware, data centers, and networking equipment. These costs are considered capital expenditures (CapEx).

  • Scalability and Resource Constraints:

On-premises environments have limitations on scaling resources, potentially leading to overprovisioning or underprovisioning challenges.


B. Data Security and Control


  • Data Storage and Control on-Premises:

On-premises setups offer direct control over data storage and security measures suitable for sensitive or regulated data.

  • Physical Security for Data Centers:

On-premises data centers require robust physical security measures to safeguard hardware and prevent unauthorized access.

  • Compliance and Regulatory Considerations:

Compliance with industry regulations and regional laws is crucial when managing data within on-premises environments.


C. Maintenance and Management


  • IT Team Responsibilities:

On-premises infrastructure demands an internal IT team to manage hardware, networking, security, and software components.

  • Hardware Maintenance and Software Updates:

Regular hardware maintenance and software updates are essential to keep the on-premises setup running smoothly.

  • Challenges and Costs of Management:

Managing on-premises environments involves complexities and costs related to skilled personnel, equipment upkeep, and ongoing maintenance.

Cloud Computing


A. Service Models and Deployment Models


  • Cloud Service Models Overview:

Cloud computing encompasses Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS), offering varying levels of management and control.

  • Types of Cloud Deployments:

Cloud deployments include public, private, and hybrid models, each catering to different security and scalability needs.

  • Advantages of Cloud Deployment Models:

Different cloud deployment models provide flexibility, scalability, and diverse options for tailoring resources to specific requirements.


B. Cost Considerations


  • Operating Expenditure (OpEx) vs. Capital Expenditure (CapEx) in the Cloud:

Cloud computing operates on an operating expenditure (OpEx) model, shifting costs from large upfront investments to ongoing usage-based payments.

  • Pay-as-You-Go Pricing and Cost Scalability:

Cloud services offer pay-as-you-go pricing, allowing organizations to scale resources up or down as needed, optimizing costs.

  • Cost Comparison between On-Premises and Cloud Computing:

Cloud computing can offer cost advantages by eliminating significant upfront hardware investments, although ongoing operational costs should be carefully assessed.


By understanding the distinctions between on-premises and cloud computing, organizations can make informed decisions aligning with their data security needs, scalability requirements, and financial considerations.

On-prem and cloud computing defined

An on-premises data center is a group of servers that you privately own and control. Traditional cloud computing (as opposed to hybrid or private cloud computing models) involves leasing data center resources from a third-party service provider.

Related HPE Solutions, Products, or Services

Benefits and Drawbacks of On-Premises Computing

A. Advantages of computing on-site:

  • Controlling and protecting data in on-site setups: On-premises setups let companies handle their data and security steps directly. This can be especially important for businesses that must follow strict rules or take private data. By having their data in their own physical surroundings, organizations can put in place and adjust security measures to their exact needs.
  • Predictable Performance and Low-Latency Access to Data: With on-premises technology, businesses have direct control over hardware and network settings, which makes performance predictable.
  • Customizable and Flexible On-Premises Infrastructure: Organizations can change their on-premises architecture to fit their needs. This includes choosing hardware components, networking gear, and software solutions that meet their needs. This level of personalization can help improve speed and better use of resources.


B. Drawbacks of On-Premises Computing:

  • High initial costs and capital expenses: Setting up a system on-premises requires a lot of money upfront. Organizations must spend money on tools, networking equipment, and other systems parts. This investment can be expensive, especially for small enterprises or businesses with limited funds.
  • Limited scale and the possibility of overprovisioning: On-premises setups may have trouble scaling significantly when resource demand increases quickly. Organizations must correctly predict what they will need in the future. If they overestimate, they may have more resources than they need; if they underestimate, they may run into performance problems.
  • IT management and maintenance complexities: On-premises equipment must be managed and maintained constantly. This means keeping the hardware in excellent condition, updating the software, adding security patches, and fixing problems. Organizations need skilled IT staff to handle these jobs, which can add to business costs and resource use.

Benefits and Drawbacks of Cloud Computing

A. Advantages of Cloud Computing:

  • Cost-Effectiveness and Flexible Pricing: Cloud computing offers an intelligent way to manage costs, as you only pay for what you use. This eliminates the need for significant upfront investments in hardware. The pay-as-you-go model allows for flexible resource scaling to manage expenses.
  • Easy Scaling and Adaptability: The cloud's scalability is a game-changer. You can quickly adjust your resources to match demand, avoiding wasteful overprovisioning. This flexibility is beneficial during busy times or growth spurts.
  • Global Access and Collaboration: Cloud services are accessible from anywhere with an internet connection. This opens up opportunities for remote work and seamless collaboration across different locations, supporting modern business methods.


B. Drawbacks of Cloud Computing:

  • Security and Privacy Considerations: Entrusting sensitive data to the cloud raises valid security and privacy concerns. While cloud providers have strong security measures, you still need to place confidence in them. Adhering to industry standards and regulations is vital to manage these risks.
  • Reliance on Internet Connectivity and Downtime Risk: Cloud services rely on Internet access. Operations can halt if your connection goes down or the cloud provider experiences an outage. This underscores the importance of backup plans and ensuring continuous access.
  • Navigating Compliance in a Global Context: Data hosted in the cloud might be subject to the laws of the countries where the cloud provider operates. This can lead to complexities, especially if data spans various regions with differing legal requirements.


Deciding between managing your infrastructure and embracing cloud solutions is about finding the best fit for your needs. Some companies opt for a mix of both approaches, benefiting from the cloud's agility while addressing concerns through hybrid strategies. By understanding the benefits and challenges of on-premises and cloud computing, you can make well-informed choices aligned with your goals and resources.

On-premises data center definition

"On-prem" refers to private data centers that companies house in their own facilities and maintain themselves. On-prem infrastructure can be used to run private clouds, in which compute resources are virtualized in much the same way as those of public clouds (however, private clouds can also be run on leased third-party hardware).

Cloud computing definition

When people speak of cloud computing, they’re most often referring to "traditional," or "public," cloud, a model in which a third-party service provider makes computing resources available for consumption on an as-needed basis. Public cloud is a multi-tenant environment, meaning that these computing resources are shared by multiple individuals or companies, with all data secured by state-of-the-art encryption.

On-prem and cloud compared

Both on-prem and cloud computing can provide your business with the IT infrastructure it needs. The model you choose will likely depend on the level of security you need in order to meet compliance standards and on the cost structure you prefer. Here’s a look at how the two models compare.

Business need: Data center single tenancy (for compliance)

On-premises: ✔

Public Cloud: X

Business need: Highly secure data encryption

On-premises: ✔

Public Cloud: ✔

Business need: Customizable hardware, purpose-built systems

On-premises: ✔

Public Cloud: X

Business need: Capacity easy to scale up and down

On-premises: X

Public Cloud: ✔

Business need: Infrastructure requires large, regular investments

On-premises: ✔

Public Cloud: X

Business need: Pay-as-you-go, usage-based pricing

On-premises: X

Public Cloud: ✔

Business need: Complete data visibility and control

On-premises: ✔

Public Cloud: X

Business need: Built-in, automated data backups and recovery

On-premises: X

Public Cloud: ✔

Business need: Near-zero downtime risk

On-premises: X

Public Cloud: X

HPE products and solutions

Hybrid cloud: Use HPE to power your apps and services, placing workloads in on-prem data centers or in the cloud, as appropriate.

Composable infrastructure: Empower your IT to create and deliver value instantly, continuously, and at the speed and flexibility of cloud—within your own secure data center.

HPE SimpliVity: Use HPE SimpliVity hyperconverged infrastructure to create an on-prem or hybrid cloud solution.