cloud vs on-premises comparison

Cloud vs on-premises comparison

Lucid Content

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  • IT and Engineering

The cloud-based server industry has disrupted the traditional on-premises server market, so IT leaders have alternatives when it comes to their information accessibility and security. But which solution is best for your organization?

Compare cloud and on-premises server solutions across a few criteria, including cost, security, and scalability, so your business can make the right decision.

Factors to consider when choosing between cloud and on-prem for your server system

Security vs. accessibility. Proximity vs. anonymity. Reliability vs. scalability. These are just a few of the criteria that IT professionals should consider when choosing between on-prem and cloud for hosting their network. With these factors in mind, consider the needs of your own organization and discuss your options with leadership and other team members.

Note: Keep in mind that you can take advantage of both cloud and on-premises server benefits with a hybrid cloud infrastructure. 

Cloud vs on-premises costs

Every business leader is constantly trying to cut down on operational costs. Tech infrastructure in modern business can add up quickly, and a cloud vs server cost comparison will help you consider the sunk and recurring costs of these options before you implement either. 

Ongoing on-prem costs for hardware and support 

While tech advancements have made on-premises software more cost-effective and efficient, dedicated on-site servers are still costly and often require more than a one-time purchase. Keeping your data accessible and secure requires hardware that is not only up to date to handle all relevant requests but also compatible with other server systems and updated software systems. An on-premises server is not just a sunk cost—it’s a recurring cost every time you need to update your hardware.

Add in the ancillary hardware required to support an on-premise server—including cooling fans, processors, and new wiring—and the costs of supporting hardware needed to maintain a physical, on-premise server can add up quickly. 

A physical or on-premises server also requires a dedicated tech team to support all of the updates needed to keep these servers functional. A dedicated tech team with service on both the hardware and software sides is the only way to ensure your on-premises server experiences as much uptime as possible. 

Predictable costs of cloud servers

By comparison, how much does a cloud server cost?

Cloud-based servers automatically update on the backend. With a vendor responsible for system updates, your computing compatibility is handled and guaranteed by a third party and built into whatever subscription model you have with your cloud vendor. This can reduce your operating costs significantly, both in the monetary and time investments required to get your system up to speed. 

Moreover, predicting costs is easy with the cloud—rather than run the risk of overspending or underspending on hardware and infrastructure for your organization’s needs, cloud storage is as simple as choosing how much storage your company needs. 

Dive deeper into the true costs of cloud computing—and see how you can save.

Learn more

Cloud vs on-premises security

There are a few things to look at when comparing the security of cloud-based server systems and their on-premises counterparts. 

Risks of managing close-proximity on-site servers

The physical proximity of a server to the company in question makes these servers an easier target and compromises on-premise security. Traditional data centers are also at a disadvantage against today’s complex threats because security protections are often dated relative to those of attackers. 

A poorly built or poorly managed server system leaves the entire system vulnerable to attack. This is especially important for highly regulated sectors like healthcare, education, and finance. For leaders in these industries, it’s critical that they research and understand the security protocol of the cloud service provider they go with. Cloud providers are serving this need by beginning to offer services that are in line with regulations like the Health Insurance Portability and Accountability Act (HIPAA), the Family Education Rights and Privacy Act (FERPA), and the Payment Card Industry Data Security Standard (PCI DSS).

Unlikely risks of physical data breaches on cloud servers 

Data stored in the cloud is hosted on servers that can be located anywhere on earth and, therefore, makes a physical data breach much less likely. 

Cloud servers have the advantage of anonymity: because they host many organizations, and embrace many different points of entry, they’re not tied to the physical location or servers of any single organization. These numerous points of entry actually make it more difficult for data and systems to be compromised and increase public cloud security. 

Cloud providers also invest heavily in security protection to alleviate fears—top cloud vendors offer protection measures including armed guards, fences, facial recognition and other biometric security devices, and surveillance cameras to prevent any cloud storage security issues.

Learn how to mitigate the top four security challenges of cloud computing.

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The right infrastructure is vital to the growth of a business, especially as it scales. Every facet of the organization, from accounting to manufacturing, logistics, personnel, and beyond, should be ready to handle increased demands. This is an area, again, where on-premises and cloud servers have clear differences.

On-prem scalability comes at a cost

For starters, on-premises servers are scalable—but they come at a cost. Being bound to physical hardware means that as your organization’s computing and data storage needs expand, so does your need for well-functioning hardware. 

Scaling with on-premises servers means purchasing new servers, and potentially purchasing new property on which to host the servers. This doesn’t even include the support hardware needed to keep it operational: voltage management systems, HVAC systems, internet pipeline and cabling, and more. 

Scaling your cloud is quite easy

Compare this with the scalability of a cloud-based server: Whenever extra processing power and data storage is needed, it’s as simple as adjusting a subscription with a cloud service vendor: no hardware and no scaling perimeters.


By sheer proximity, on-premises servers seem to give more control over operations—having your own team to set up privacy and access protocol, install antivirus software and firewalls, and protect against cyberattacks can give some companies an improved sense of confidence, assuming they have adequate IT support to set up and maintain their on-prem servers. 

While technically true, cloud services offer as much access and control, if not more, as an organization would reasonably need, while eliminating most if not all of the cumbersome maintenance tasks associated with on-premises servers. 

For example, natural disasters, while rare, can pose a significant risk to on-premises servers. Hurricanes, tornadoes, and wildfires are just a few examples of natural disasters that pose threats to on-premises server systems and the data they host. Cloud providers simply provide more protection, with Amazon Web Services even reporting that between 2015 and 2017, they experienced fewer than eight hours of downtime. 


Cybersecurity is the study and set of secure practices that ensure computer security and data accessibility. In this respect, on-premises servers and cloud servers have a couple of key differences. 

On-prem poses accessibility challenges

Because they’re the result of a period of rapid tech advancement, physical or on-premise servers are often a mishmash of aging tech hardware that can be a headache to update and maintain. Further, having dedicated hardware means having dedicated software, and part of the job of organizations with on-premises servers is keeping up with the correct software as well. 

Operating systems function only with the right hardware, and physical hardware system maintenance requires investments in hardware updates, software purchases, vendor licenses, and vendor license updates. 

Accessibility is multi-faceted, however, and may be the only area where on-premises servers may have a slight advantage over cloud-based systems. Because on-premises server systems rely on hardware rather than an internet connection, they can be more accessible in areas and circumstances with limited internet connection. However, these circumstances are rare. 

Cloud offers easy access  

A public cloud service provider, on the other hand, is responsible for vendor updates, which may be enticing to some companies. They’re able to distribute the cost of updated software amongst all of their clients, reducing the individual cost for each client. 

It’s worth mentioning that cloud-based software is notoriously easier for employees to access and collaborate on compared to traditional software downloads that must—and can only—be accessed on a specific device. 

Backups and data recovery

Losing information and experiencing a data breach is the worst nightmare of many IT professionals. In fact, data recovery is a lucrative service provided to businesses of all sizes.

On-prem data backup put a strain on resources  

Many of these businesses work with on-premise server utilizers—there are many organizations whose business model is to backup servers in case of emergency, and recover information in the event of a natural or unnatural data breach.

Protecting against a data breach is not just monetarily costly—recovering data takes time and energy that will most likely drain from your organization. 

Cloud data backup is remarkably simple

Not only is cloud backup a suggested practice of any business (as automatic daily data updates), but cloud service vendors are typically contractually bound to manage data backups on your behalf. 

Redundancy and RAID: Differences in data

The major advantage of cloud-based servers is redundancy—the ability of cloud systems to back up data multiple times with zero loss of information—and a common feature within redundancy is RAID.

Redundancy Array of Independent Disks, otherwise known by IT specialists as RAID, is the process of creating several copies of files throughout multiple hard drives. The primary focus of RAID protocol is that, if and when a single hard drive in the array fails, the other hard drives in the array pick up the slack, ideally with minimal interruption.

Most on-premises data servers run RAID 6. The program protects against two-disk failure and works by offering two spare disks to backup operations, even if the original two disks fail. This system, even while providing the highest success rate in long data retention environments, still requires some parity management, which will result in disk overload and some amount of latency.


Personnel is also a major consideration when setting up your server system. 

Support at cost with on-prem

An on-premises system will require a dedicated professional team to maintain machinery, a server room, and operating systems. From preventing breaches to implementing security measures to correcting security errors, IT support personnel can represent a considerable cost to any organization. 

Cost savings and support with the cloud

Compare this to web-based cloud service providers who offer complete 24/7 technical support and who do it at no additional cost. The time saved from dealing with hardware, plus the monthly cost savings make the cloud an almost flawless market competitor in modern server systems. 

Find the right solution for you

Predicting problems can be an endless and fruitless guessing game. And still, technology is in the game of improving upon itself—cloud-based servers seem to be the latest in that trend. From cost and time savings to enhanced security, accessibility, and flexibility, the cloud is proving to be an overall better option for businesses of all sizes and industries. 

If you decide to transition your business to the cloud, review our tips for executing a successful cloud migration strategy.

Read more

About Lucidchart

Lucidchart, a cloud-based intelligent diagramming application, is a core component of Lucid Software's Visual Collaboration Suite. This intuitive, cloud-based solution empowers teams to collaborate in real-time to build flowcharts, mockups, UML diagrams, customer journey maps, and more. Lucidchart propels teams forward to build the future faster. Lucid is proud to serve top businesses around the world, including customers such as Google, GE, and NBC Universal, and 99% of the Fortune 500. Lucid partners with industry leaders, including Google, Atlassian, and Microsoft. Since its founding, Lucid has received numerous awards for its products, business, and workplace culture. For more information, visit

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