What are the advantages and disadvantages of on-premise solutions vs cloud-hosted environment?

Hello community,

I work at a tech. services company and I would like to understand the pros and cons of an on-premise solution vs a cloud-hosted one (i.e., outsourcing).

My use case is 1000 users. 

Thanks for the help.

IT at a tech services company with 10,001+ employees
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5 Answers
Steffen Hornung - PeerSpot reviewer
Administrator at Neuberger Gebäudeautomation GmbH
Real User
Top 5Leaderboard
Jun 27, 2022

@Oliver Chitsamatanga, ​

The correct answer: it depends.

But firstly, let's correct your question: cloud-hosted does not necessarily conclude outsourcing. It is totally normal to self-host something in the cloud.

This triggers another point: do you need to compare on-premise vs cloud or do you need a comparison of self-hosted (on-prem or cloud) vs SaaS (Software-as-a-Service)?
We can do both.

On-premise means always that you install something on your servers, configure it, patch it, update it, secure it. Whatever has to be done will be in your responsibility. That is on-premise or self-hosted in your own datacentre.

The same goes if you have your own servers in the cloud either with co-location (your own servers in a leased rackspace) or some virtual or physical machine you lease from some hosting provider (the difference here is just a shared hardware vs a destinct hardware). That is self-hosted in the cloud
Either way, you install everything (or it comes pre-installed like with some server vendors where Windows comes preinstalled on the box), configure,patch and secure it. 

The other thing is truly outsourcing: Software-as-a-Service.
You pay your fee for your piece of a service. This service is in general a multitenant service, easily customizable and freely accessible from any computer with internet access.

But outsourcing could also be a subset of anything you are not comfortable or not willing to do or lack the knowledge to do and have it done by someone for you. Which in turn bills you for this service.

So we covered what is what. Lets get into what are the pros and cons:

On-Premise (Pros): 

An on-premise solution has the advantage of being completely under your control in a safe environment. The solution pricing is most often a combination of an upfront prize with a yearly update/upgrade+service fee. This is cheaper in the long term compared to cloud-solutions abonnement-kind-of-billing. With on-premise you can often get discounts which is not common in cloud-solution agreements. Another advantage: as it is only you who uses the solution, you can easily expand the solution with 3rd-party add-ons/plugins to get more out of it.

On-Premise (Cons): 

On the other side, you have to enable external access if you have users at home/office or on travel. This with increasing bandwidth-consumption can render on-premise more expensive. As stated above: everything is in your hand. This also means you are paying for everything. Rackspace, storage, licensing, cooling, heating, power, hardware, internet line. Thats all upon you. If your 3rd-party add-ons/plugins break the solution thats upon you also.

Cloud (Pros):

A cloud-hosted solution has the premier advantage of ease of access. You are just responsible for giving your users access to their accounts for the service. Like with MS Teams you pay your fees and MS cares for a stable service. Everything beyond administration of the service is up to Microsoft. Most prominently security is their deal and widely considered more secure than with on-premise. Cloud-solutions are much easier to adopt. No installation, just account setup. You also can drop your user count when that is necessary.

Cloud (Cons):

Cloud solutions don't allow too much expansion with 3rd-party add-ons/plugins. They rather you buy that functionality from them (if available). Which also minimizes security risk as the provider has full scope on security. You often wonder how to migrate to a competitor as all your data has to be taken from provider A to provider B (or perhaps solution C when taking the solution back on-premise). Sometimes you find yourself locked-in to your vendor.

These discussions are not easy ones. You have to ask many questions to your cloud provider to understand what is covered and all those things. Like backup coverage.

Search for a product comparison in Backup and Recovery Software
Richard Artes - PeerSpot reviewer
Senior Network Admin at a educational organization with 501-1,000 employees
Real User
Top 5Leaderboard
Jun 28, 2022

We use both: on-premise backup for short-term, fast access to data. Cloud-hosted for long-term, cold storage, and to create an off-site backup.

Advantage of on-premise is quick, fast access to data. Disadvantage is you have to manage and pay for the hardware yourself.

Advantage of cloud-based is the hardware and security is managed for you, and the remote location to protect against disaster. Disadvantage is the slow recovery time, and potential cost of accessing the data.

Caesar Malenga - PeerSpot reviewer
Senior Systems Analyst - Infrastructure at Workers' Comp
Real User
Top 5
Jun 28, 2022


On-Prem backup has the advantage of easy access to your backups. You simply spin up the media (tape or hard drive) and access the backup.

It can be said to be more secure as it is protected by your various physical and logical protection. As opposed to being stored where physical security is unknown.

With regards to the Cons of On-Prem backups, the first major issue is that of space limitation. With your 1000 users, you are talking of every user with ~50GB which would translate into Petabytes and would probably not have much space. If you can invest in a JBOD box with a cheap slow NL-SAS drive that you would use for user backup, that can suffice.

A cloud-based backup will simply be backing up your data to some web-based storage like OneDrive, GoogleDrive, Mega and several other options. 

There are free storage as well as paid solutions and am sure you know paid solutions. In the case of Microsoft, $2/month for 100GB of storage; $70/year ($7/month)for 1TB of storage. Microsoft 365 Family offers a one-month free trial, then it's $100/year ($10/month). The family package offers 6TB of storage. If you can manage this cost then, the cloud is your thing but it has the requirement for a Fast internet link to ship the backups across. I have a user who generates 40GB backups daily and fails to ship the backup to the cloud solution making it unusable because of our slow internet.

Whatever the solution you will end up with, it will have to answer the following questions:

- How quickly can I backup my data?

- How quickly can I access my backed-up data?

- Is my data safe where I am storing it?

- What is the long-term cost of keeping this data?

The answer to these questions will guide you on which solution to eventually take



Systems Admin at a wholesaler/distributor with 501-1,000 employees
Real User
Top 5
Jun 27, 2022

There are advantages and disadvantages to both on-prem and cloud backup solutions. It depends on where the data is stored to start with, the amount of data, and the type of data.

There are also costs involved as on prem would have a higher cost up front for the infrastructure but if your data is in a local data center would be more accessible for backups and restores.

While cloud is inexpensive for the storage there are normally tiers and different costs based upon hot, cool, and cold storage.  And depending on where the data is stored in the cloud there are different costs associated with restores.

You might need a hybrid model where you do some backup/restores on-prem and some in the cloud.  

There is no one solution that fits the bill for all companies so you have to weigh all the options that best fit your needs.

Just remember that the data is important and that many times cloud providers only backup their infrastructure and not your data that resides in their cloud. You have to assign a risk factor if you can afford to lose some data that might be hosted. 

A good example of this would be Microsoft 365. Microsoft guarantees the system, but if someone "accidentally" does a permanent delete on their inbox, the data would be gone unless you had a 3rd party solution to backup that data.

Sr. Technical Support Engineer at Veritas Partner
Top 10
Jun 27, 2022

It depends on your requirements. Mostly, a backup solution covers the cloud as well (e.g., products like Veritas NetBackup you can integrate with the cloud). 


-No need to manage infra. You just need to work on an application.

-Easy installation.


-All your data would be in your own DC and 

-You can manage it as per your company policy

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