On-Premise vs Cloud Computing: When is the Right Time to Move?

In his book, The Big Switch, technology author Nicholas Carr correlates today’s digital revolution to electricity, likening cloud services to a computing power plant that companies can tap into to access computing solutions.

It’s a neat analogy, and worldwide, organizations of all sizes are “plugging into” the promise of cloud-based services. Today, according to the Spiceworks 2014 State of IT report, 61% of IT pros have adopted cloud solutions – with another 8% expected to adopt within the next six months. Expenditures for hosted services, the report notes, accounted for 14% of IT budgets in 2014 (behind hardware and software expenditures).

All of this begs the question: Is there a “right” time to move from your on-premise IT infrastructure to the cloud? The short answer is – it depends. Let’s consider some of the influencing factors:

A Control Issue

A company’s technology systems and the information that resides in them are among its most valuable assets. So moving these outside of the oversight and control of the IT staff that is responsible for the availability, protection, and performance of these assets can tend to cause some fear – and it’s not just about job security. The cloud simply may not be tangible enough – or secure enough – for some organizations, particularly those in industries that need to meet strict regulatory compliance, to consider hosted services as a viable option.

Yet, while some may cite security as a reason to avoid the cloud, IT consultant and CollegeOptimizer.com founder Corbett Baker offers a sobering point, “As someone who spent almost a decade in supporting SMB infrastructure, I can attest that the average on-premises infrastructure is largely a single cylinder lock: it can be picked by nearly anyone.”

The Cost Debate

In Baker’s view, the move to the cloud is “purely” an economic one, particularly for smaller companies that “can reap the benefits of Enterprise services, without the cost associated with highly trained professionals.”

Certainly, cloud services cut down on the long lead times, ongoing maintenance, and big bucks of customized on-premise solutions, and enable companies to tap into computing solutions quickly, with:

  • No upfront capital investment in hardware or software – hosted services are an operational expense (OPEX vs CAPEX)
  • No specialized skills or resource commitment for ongoing management and maintenance

In the cost debate, it’s not always about how efficiently your in-house environment is run that prompts the decision to stay on-premise versus move to the cloud. Sometimes it’s about the opportunities that come with offloading certain IT responsibilities to a service provider. “The whole purpose of going [to the] cloud,” notes Amartya Mandal https://www.linkedin.com/in/amartyamandal, architect at Cognizant Technology Solutions, is to give you the ability “to focus more on your business/ideas.” As-a-service offerings free up IT budget and resources to pursue innovations and other projects.

And, of course, “it is not always a question of which [cloud or on-premise] is cheaper,” says Sharon Salmon https://www.linkedin.com/in/sasalmon, head of new business at Premier IT in London, “it is more a question of which is a better solution for the individual company.”

The Benefits in the Cloud

Beyond cost efficiencies, the promise of cloud computing is rooted in flexibility, particularly for organizations with smaller IT staffs and budgets, or those with a focus on more strategic business-driven projects.

  • Cloud-based services provide scalable access to enterprise-level solutions that can grow – or shrink – on demand based on your your business needs
  • Providers of hosted services regularly offer service level agreements (SLAs) that preset expectations for the services that you are buying into, as well as for timeframes of issue-resolution, help desk response, backups, and security measures (both physical and cyber access security).
  • Tapping into a hosted service allows a unique opportunity to evaluate whether a technology is right for you. Pradeep Thangavel, devops engineer at Freshdesk, agrees, and notes that the cloudis really helpful for start-ups and for people who want to try something new” – without the risk or investment of an on-premise solution.
  • As today’s workforces become more mobile, and as trends for bring your own device (BYOD) become more prevalent, hosted services provide a liberating solution for both IT and users since they can be accessed by authorized users conveniently from any device with a web browser.

What Are Others Buying?


If you’re contemplating a move to the cloud, it may help to know what services other companies are relying on it for. According to the Spiceworks report, the top six cloud-based services being used today in North America and EMEA combined, include:

  1. Web hosting – 80% (also the top service used by companies regardless of size)
  2. Email hosting – 58%
  3. Productivity solutions – 51%
  4. Content filtering – 44%
  5. Application hosting – 42%
  6. Backup/recovery – 41%

Spiceworks also predicts that productivity solutions and online backup and recovery are the cloud services areas that will “capture the most new dollars” (versus recurring expenditures).

In the end, the “right” time to move to the cloud really does depend on your specific business and IT goals and requirements. But, as ClipTraining founder and InfoWorld journalist J. Peter Bruzzesse notes in his article, There’s no Future in On-Premises IT – It’s Time to Move to the Cloud, “In the age-old rent-versus-buy debate, the cloud is making rental very compelling, especially as managed cloud environments begin to implement tools that provide automated spin-up/spin down to avoid excessive consumption of resources (and higher costs).”

Contact for a Free Consultation