Managed IT Services November 7, 2016

On-Site Storage Vs. Cloud Storage: Beyond Just Cost Savings

Written by Analytix Editorial Team Jagruti Patel

Whether you are a startup or an established business looking for rapid growth, your business needs an efficient data storage solution. Creating an on-site data center is one option, and choosing cloud storage is another.

Assessing the Basics First

What are the “Definition of Terms” on-site storage and cloud storage?

On-site storage: On-site storage refers to hardware that is within the physical premises of your business or office and which stores all the data pertaining to your local network. Your in-house resources, such as IT department and IT experts, will be responsible for maintenance, upkeep and regular updating of the storage system.

Cloud storage: Cloud storage is a service that allows you to store your data on the internet. There is no physical boundary involved. Cloud services are outsourced to third-party service providers who are also responsible for the maintenance of the storage system.

Trends and Numbers

The world is evolving into a completely digital environment. The question now isn’t whether you as a business would want to capitalize on these trends but rather when you will do it. Regardless of business size or phase, you can leverage new technology to grow rapidly without affecting your core strengths.

Consider these statistics:

According to a Goldman Sachs report, the cloud computing market has only experienced growth for both infrastructure and platforms. If companies were spending around $15-$20 billion on cloud computing in 2014, it is estimated that, by 2018, they will be spending more than $40 billion on it.

Calculated as the percentage of their total enterprise IT spending, these figures amounted to approximately 3%-4% in 2014.  They are expected to increase to more than 10% in 2018.

According to an IDC report, the worldwide public IT cloud spending, which amounted to $56.6 billion in 2014, is expected to grow exponentially to $127.5 billion by 2018.

A Comparison of the Two Systems – On-site storage vs. Cloud storage

Here we evaluate the two systems on the basis of variables of cost, security, downtime and control to help you arrive at an effective decision for your company. 

  On-site storage Cloud storage
Downtime & Availability
  • For on-site storage, you need to ensure your in-house IT department is equipped to handle it and provide an alternate to downtime, if and when it happens.
  • Time lost in downtime is equal to loss of precious business and money.
  • Cloud storage providers have their tech support systems in place and have solutions or alternates for downtime at the ready. Work and business continue without loss on business or money.
  • Cloud storage results in faster deployment with little loss of time, as resources are ready and you just have to tap into them.
  • On-site storage will provide you with total control over your information, including even your equipment since it is housed within premises, or on the site.
  • If your business runs several applications, on-site storage may prove to be more useful to you as it will handle the workload better.
  • A cloud storage solution might even be shared with other users, especially if you are on a public cloud.
  • For enhanced control, you can choose a private cloud, but even then, your control will be limited as it is controlled by a third-party, and isn’t internal.
Cost Savings
  • Beginning with purchasing the kind of equipment needed, to establishing the quantity, to setting up infrastructure and maintaining it, the on-site storage center will need heavy investment.
  • Need to invest in staff and trained human resources to manage on site storage efficiently and troubleshoot when needed.
  • Software purchases also need security patches and critical updates on time.
  • In case of breakdowns, the cost of repairs and replacement also needs to be borne by your company.
  • All cloud storage expenses are borne by the vendor. This includes regular updates as well, however costly they may be.
  • Hardware costs are also not applicable to your business because the vendor has already purchased the necessary equipment.
  • The vendor also takes care of matters like trained personnel, as well as breakdown remedies.
  • Software details like migration to upcoming systems and their implementation are also taken care of by the vendor when you choose cloud storage.
Security & Privacy
  • Your data is secure in your on-site storage center, provided your software, which stores it, is safe from physical harm.
  • If the issue is redundancy, addressing and repairing it could take time and depending on the seriousness of the problem, your staff might need time to deal with it and find a solution.
  • A cloud storage system comes with its own set of security checks in place.
  • From encryption to restricting authorized access to enforcing best practices, a cloud storage vendor already has checks in place to ensure data security.

Making the Crucial Decision

The decision to go with either solution will finally rest on your business’ unique needs, matched with the budget you have to invest in IT. The perfect solution for you will meet all your needs while also matching your established budget.

However, if you are a startup pursuing business development and are in the process of building a revenue stream, a cloud storage solution might work best for you because it eliminates the hassles and costs associated with setting up and maintaining a system on an ongoing basis. As discussed above, tapping into cloud storage also allows you freedom from being responsible for crucial data security, on a daily basis.

Finally, before investing in an on-site storage center, consider the savings from a cloud storage solution in terms of security, downtime management, control, upfront spending and cost over a period of time, and whether the savings would add value to your business or not. This should allow you to zero in on the right decision.

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