Your business’s IT procurement team has an important decision to make: Should they invest in a traditional, on-premise infrastructure, or go with a cloud-based solution?
Let’s discuss the operational differences, cost structures, and long-term growth potential of each option so you can choose the best IT setup for your business.
There are two general approaches for your IT procurement team to consider regarding business technology:
Some businesses select a hybrid option, maintaining some on-prem servers and cloud services to meet their needs.
The route your IT procurement team takes will depend on a myriad of factors, including supplier relationships, cost, compliance, security, customization, and more.
If your IT procurement team is considering an on-premise solution, here are some factors to keep in mind.
An on-premise approach comes with large upfront costs because of the complexity of custom setups. These costs cover hardware such as servers, storage systems, network equipment, and different licenses to use the required software. All of these costs are considered capital expenditures (CapEx), which can become a burdensome financial investment for smaller companies and startups.
After the initial setup, on-premise IT requires ongoing maintenance and management. Upkeep includes:
Ongoing expenses can add up quickly, which is why it’s best for organizations with healthy IT budgets.
If your business needs a high level of IT control and customization, on-premise is ideal. You’ll have authority over the hardware, software, configurations, and more, equipping your team to create solutions that address unique business needs. This level of control is especially useful for companies with complex IT or cybersecurity requirements.
Some industries have to abide by strict regulatory requirements, such as government and healthcare. In this case, on-premise solutions can be beneficial. It gives these organizations physical control over data storage and authorized access protocols. It also enhances the ability to implement custom security measures and monitor compliance across departments.
If an on-premise approach sounds a bit too complex for your organization, here’s what your IT procurement team should consider with cloud options.
Cloud IT platforms often have a subscription model where IT costs are allocated to operational expenditure instead of capital expenditure. There are a few benefits to this approach, including:
Overall, cloud structures can enable more financial flexibility for businesses that need to closely manage cash flow.
Most often, cloud solutions are highly scalable depending on the amount of usage. In other words, resources can be efficiently scaled up or down depending on your IT needs. Your team can test different features and services, choosing which ones to toggle on or off.
Additionally, businesses can often experiment with various providers until they find the one that works best—without worrying about the financial burden of upfront costs. With the global infrastructure of cloud providers, it’s also possible to expand as your organization sees fit. This level of flexibility helps you adapt to market changes and new opportunities.
There are fewer maintenance requirements with cloud systems because providers typically handle the update processes. With this task outsourced and made virtually automatic, you get
These simple maintenance features can free up your employees’ time and energy to focus on profitable tasks instead of IT management.
Perhaps the biggest point of doubt surrounding IT via cloud systems is the level of security and compliance. Organizations have concerns regarding:
That said, leading cloud providers often invest in strong security measures to satisfy their customers and prevent legal challenges. If you find the right cloud provider, the security could be stronger than a custom infrastructure you set up in-house.
Because there are pros and cons to each type of IT approach, it’s helpful for your IT procurement team to conduct a thorough comparative analysis before making a decision.
Consider the immediate and long-term costs of each type of IT solution.
On-Premise:
Additionally, on-premise options are often expensive to switch out of if you ever need to change technologies or workflows.
Cloud Computing:
Depending on your provider, there may also be hidden costs to consider.
On-premise options typically involve predictable performance that’s customizable for intense workloads. This can result in low latency, quality control, and large bandwidth.
Alternatively, cloud options generally come with availability and reliability because infrastructure is globally distributed. This can give you a larger reach, immediate updates, and fluid scalability.
Consider everyday operations and long-term goals.
Does your industry have stringent compliance measures that you must continually monitor and control? On-premise is the most secure IT option.
Do you need IT solutions that are affordable and scalable? Cloud is your best bet.
Do you run a large enterprise that needs both of these outcomes? A hybrid approach might be ideal, leveraging both on-premise and cloud setups.
Combining on-premise with cloud-based IT can offer some businesses the best of both worlds. For example, if your organization manages complex workloads with sensitive data but also has a large staff with less demanding tasks, a hybrid solution can serve both operations.
Some companies also transition from one IT option to another over time. In this case, it’s helpful to have a hybrid system in place to ensure smooth data transfer and plenty of training time for employees.
For your IT procurement team to choose the best solution, they need to conduct a careful evaluation of your organization. Consider the costs, business goals, performance capabilities, and level of scalability your company needs both now and in the future.
To help you through this important decision, Meridian offers comprehensive IT consulting. We help you find the perfect infrastructure, whether it be on-premise, cloud, or hybrid.
If your IT procurement team would like support in setting up your systems in a way that meets future business goals, discover the Managed IT Services at Meridian today.