Cloud vs. On-premise digital workplace: Which one is right for your business?

eXo Platform Blog

In today’s rapidly changing IT enterprise landscape, choosing the right digital workplace for your business can be difficult. IT buyers must consider several factors before making a purchase, such as the budget and cost structure, interoperability and integration with existing IT systems, ease of use, additional services (support, maintenance, upgrades), and of course whether to opt for cloud or on-premise deployment.

In this blog post we take a deeper look at hosting options, the key differences, and which one is right for your business.

On–premise

As its name implies, an on-premise digital workplace solution is hosted on your organisation’s premises and managed by your own IT team. It is considered the traditional way of installing and operating enterprise software, and is still widely specified by IT professionals looking for greater control over the software and data in use, and a guarantee of high levels of security and compliance.

Cloud

By contrast, a cloud based digital workplace is hosted on cloud servers and accessible via a web browser. Cloud hosting has grown in popularity in recent years, with tech giants such as Google, Amazon, and Microsoft investing heavily in the technology. According to a ‘state of cloud’ report by Flexera, 94% of respondents stated they use at least one public or private cloud. Additionally, global IT spending on cloud services is expected to reach nearly $500 billion in 2023, up from $229 billion in 2019, as reported in the Worldwide Semiannual Public Cloud Services Spending Guide. The same guide predicts that cloud spending will surpass traditional on-premise spending for the first time ever.

Despite the huge shift towards the cloud in recent years, the “cloud vs. on-premise” debate is still dividing opinion. On the one hand, some businesses still have a conservative approach and would rather manage the software in-house for fear of security breaches. On the other hand, others value flexibility and ease of access even if it means less control over the software.  To make an informed decision, it is crucial to understand the differences between the two types of hosting.

Key differences between Cloud and On-premise

  • Access

With more and more companies adopting remote working policies even before the COVID-19 pandemic, digital workplace that is easily accessible anywhere and from any device has become a necessity. Choosing the cloud will help you to provide access to your digital workplace. Employees have only to access the platform directly from their web browsers and enter their credentials. Remote access can also be provided with on-premise deployment through techniques such as remote access VPN and remote desktop, among others.

  • Cost

Cloud deployment is cheaper in the short term, since you will be basically paying for the service and perhaps additional costs such as deployment, support, and training. On-premise deployment requires you to pay for the software licence in advance, as well as hardware, maintenance, and labour fees.

However, in the long term, Total Cost of Ownership (TCO) is lower when you manage your software in-house rather than in the cloud, especially if you have the right infrastructure in place or you would like to further customise or integrate the solution with legacy systems.

  • Control

Obviously, having the software installed and running on your servers gives you more control over data and more room for customisation. Additionally, government agencies and organisations in highly regulated industries such as healthcare, finance, and banking require full compliance with data protection laws. As for the cloud, there is a growing scepticism over data ownership. Third-party providers often hold your data for you, which is not ideal for companies dealing with highly sensitive data.

  • Scalability

Cloud-hosted solutions offer more flexibility when scaling your business and adding new users without having to upgrade your infrastructure. However, it is worth noting that this may end up being costly, as most subscription models follow a per user per month/year model.

  • Security

Security is a major concern for businesses, especially those handling critical data such as patient records or employees’ personal information. As is the case with control, on-premise deployment is often seen as the more cautious option, especially with the highly publicised data breaches that have occurred at some cloud providers. However, with time, the cloud has gained the trust of IT departments as it guarantees higher levels of security through strict measures, continuous upgrades and maintenance that are not affordable for most businesses.

Which one is right for your business?

Deciding how and where you will host your digital workplace depends entirely on your business objectives, your industry, and the available resources in terms of budget, IT personnel, and infrastructure.

For example, the cloud is ideal for small to medium-sized businesses lacking the resources to start a digital workplace project from scratch. In such cases, the software and cloud provider handles data, security and system upgrades which guarantees quick deployment, remote access, and optimum performance in the long term. Additionally, scaling the business and adding new users is made easy, as most digital workplace solutions charge on a per user per month/year model, as mentioned above.

On-premise deployment is most suitable for government agencies and large international corporations within highly-regulated industries,  which have the resources and know-how to handle the various stages of a digital workplace project. As mentioned earlier, security and control over the software are the major concerns for these organisations, which makes on-premise deployment the better option.

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Product Marketing Specialist

I am a product marketing specialist at eXo. My role is to assist marketing and sales teams in their operations and present our digital workplace solution to the world. I mainly blog about the latest tech trends, digital transformation, internal communication and how to navigate through eXo Platform.

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