Your data is the backbone of your organization, so keeping it secure is of the utmost importance. When companies are considering how they want to store and protect their data, there are two main avenues to consider: on-premises storage and cloud storage.

When you store your data on-premises, it will live on locally operated computers and servers. Cloud storage, on the other hand, utilizes external servers that are managed by a different company. Before you make a decision about which route to take, you need to assess your business needs and priorities. 

Here are four factors to consider when making a decision between on-premises and cloud data storage.



On-premises storage requires more capital investment up front. Companies will need to acquire servers and other hardware and install it on-site at the location where you plan to host the equipment. This can be a challenge for companies that are just starting and may not be able to afford a large initial investment. Having your own servers and hardware also requires maintenance to the systems, an IT team to handle the on-site support, and purchasing additional software and license as your company expands. Choosing on-premises data storage frees your company up from monthly or yearly payments, however, which is not the case with cloud storage options. 


Cloud storage generally follows a pay for what you need system. For this reason, cloud storage can be a cost-effective option for companies that are just starting out or who don’t have the capital. Many cloud storage companies offer different packages with unique and customizable capabilities, allowing you to choose an option that best suits your company’s needs. This also makes the process of scaling up or down a lot simpler, and places the burden of maintenance and equipment purchasing on your vendor. Because your data will be stored in the cloud, you will need the internet to access your data—the requirement for reliable and high-speed internet can cause your company to pay a high monthly internet fee. 


On- Premises:

As its name states, on-premises storage sits on your company’s premises. This has a significant impact on the security of your data. On-premises servers are only accessible to those within your network and can be restricted to a set of authorized users. This is beneficial for companies who are dealing with information that they don’t want to share with a third-party vendor. While companies with on-premises servers don’t have to worry about another company managing their data, they do have to consider the risk of data loss. In the case of system malfunctions, your company could permanently lose stored data. To mitigate this risk, companies can invest in off-site backups to hold duplicate copies of your data. Data backup may require assistance from your data administrator, system engineers and admins, and network engineers. 


When you are storing your data in the cloud, you are putting your trust in your vendor. A study conducted by IDC revealed that “79% of companies experienced at least one cloud data breach in the past 18 months, and 43% said they had 10 or more.” With a cloud provider, your data adheres to the vendor’s security protocols, not by standards created by your own organization. By involving another party with your data, you increase the risk of having an unauthorized user access your data. While many cloud data storage providers have robust security protocols, many companies remain cautious about storing their data in the cloud. Unlike on-premises servers, cloud providers can offer automated backups for your data, making data recovery and accessibility much easier. 



In general, on-premises servers require a longer implementation time. The time it takes to implement can vary based on the company’s resources and the amount of data they’re storing, as well as the complexity of their classification system. Creating an in-house storage solution requires customization and demands an infrastructure suitable for scaling. You must consider the time spent on upgrading your system, possibility of server downtime, and time it takes to back up your data. However, because you are dealing with a private storage system, your accessibility to data and your ability to download large amounts of data without lagging is greater. 


A benefit of cloud storage is that you can greatly decrease the implementation period. Companies who need to get their storage up and running quickly, may want to opt for a cloud provider. In addition, your company can also save your IT team valuable time as the provider will handle updates, routine checks, and installation of the storage. While cloud storage may save you time on implementation, overall downtime, and upgrades, your ability to access files is dependent on the internet speed and server location.

Accessibility and Flexibility


One of the biggest differentiators between on-premises and cloud storage is that on-premises doesn’t require internet access and is hosted through your internal network. This means that loss of internet connection will not compromise your data or your accessibility. When dealing with mission-critical apps, an on-premises server can guarantee their productivity despite internet failures. Additionally, as the owner of your storage system, you have the ability and control to modify your server to fit your needs. 


With the cloud, your access and your experience depends on the internet connection. Reliable and robust internet connection is essential for accessing your files, downloading data and your productivity. 

Opposed to on-premises storage, cloud based storage offers an infrastructure that is created to scale. Cloud storage vendors provide subscription updates, allowing you to quickly scale without having to buy new hardware. 

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Mary Hodges
About Mary Hodges

Mary Hodges is the Community Manager for Systematic.