April 19, 2019 Last updated April 17th, 2019 4,037 Reads share

The Cloud vs. In-House Server: What’s Best for Your Business?

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In today’s digital world, the server setup you work on can be considered as the lifeline of your business process as all the data and application are installed on it.

However, whether to have a cloud-based or in-house server infrastructure is a big decision to make. While the selection may sound like black-or-white, many factors should be considered before making the selection.

Below are some pros and cons of both that can help you guide through this tricky decision.

Cloud-Based Servers

A cloud server is a virtual server that is created, hosted in a cloud computing environment and can be accessed remotely via the Internet.

The pros of cloud servers include:

  • Security: Cloud service providers have the expertise to make sure that your data is secure. Provided you keep the credentials confidential, only you have access to the data.
  • Scalability: With the help of cloud technology, you can easily and quickly add more memory, storage, and computing power without the hassles of hardware replacement.
  • Low Capital Expense: While you still need to purchase software licenses, there is no need to invest in hardware with cloud technology. This particularly benefits small companies and allows them to get up and running quickly with significant cash outlay. Moreover, most cloud providers charging you only for what you need.
  • Automatic Backup: With cloud servers, you get peace of mind that, no matter what happens, you would not lose the data or files as the cloud providers deploy automatic backup.
  • Accessibility: Cloud gives you the flexibility to work from anywhere and at any time as long as you have an internet connection.
  • Eco-friendly: Cloud benefits not only your business but also the environment. To minimize their carbon footprint, data centers are now going green. According to the Environmental Protection Agency, data centers in the US now account for 1.5% of the electricity consumption and by the year 2020, carbon emissions will be quadrupled to 680 million tons in a year.

The cons of cloud servers include:

  • Time-consuming data recovery: While the cloud makes data backup easy, restoring large amounts of data can take a lot of time even with a fast internet connection.
  • No access without Internet: If yours or your cloud provider’ Internet goes down, you won’t have access to the data or files. However, as soon as the Internet is restored, all the data is synced automatically.
  • Services outages: All cloud service providers have them, even Amazon or Facebook. And when they go down, you can’t access your applications and data which aren’t stored. Although the major cloud providers guarantee an uptime of as high as 99.999 percent, for most cloud providers, the downtime value is significant.

In-House Servers

As the name suggests, an in-house server is installed on the premises (usually the office, studio, etc.). It provides all employees access to the stored data and applications using the local systems.

The pros of in-house servers

  • Total control: With an in-house server, you have the complete physical control of updates, backup and of, well everything, which means that you can tailor it to fit your business’ requirements.
  • Compliance: In-house servers allow you to keep all the critical data and information in-house – no third party has access to it. This is highly beneficial for businesses dealing with strict regulations or has highly sensitive data.
  • No dependency on the Internet: You don’t need to be dependent on the Internet to access your data. Even if your Internet is inaccessible, you can perform operations on your server, thus no loss of productivity.

The cons of in-house servers include:

  • Disaster Recovery: One of the main concerns with in-house servers is that it won’t survive in worst-case scenarios like natural disasters and is more susceptible to data loss.
  • Space Considerations: Servers take up space, need a lot of power and generate heat. To run efficiently, they need a safe location, power, and cooling system in place.
  • Cost: Cost of an in-house server isn’t as low as one may think. Companies need to pay for dedicated IT staff, hardware, maintenance, upgrades, and renewing licenses. Moreover, when things aren’t done automatically, you need to spend time. We all know, time is money.
  • Downtime: There is no up-time or recovery guarantee with in-house servers, making your business more susceptible to downtime.

Striking the Right Balance Between the Cloud and In-House Servers

To decide whether to store your data on the cloud or in-house doesn’t have to be a strict matter of selecting among the two. In some cases, a combination of both (hybrid) works well. For companies having budget constraints, the cloud can be a good option. Other companies may want to run in-house servers to take care of usual tasks and move to the cloud for additional capacity.

The adoption of hybrid cloud is also increasing. According to Markets & Markets, by 2023 the hybrid cloud market would be worth almost $100 billion.

However, companies should consider their needs and type of business process before making a choice. This includes prioritizing their requirements for computing, security, performance, storage, data transfers and, of course, the amount they are willing and able to spend.

Final Recommendations

An important factor while considering whether to use a cloud-based or in-house server is the extent to which the security and privacy of critical data are maintained. Here are some of the options for maintaining the highest level of confidentiality and control over your data.

Option 1: Go with a cloud provider that can effectively minimize the unintended disclosure of critical and confidential information.

Option 2: Go with an in-house server and have policies, and infrastructure in place to minimize unintended disclosure of critical and confidential information.

Option 3: Use in-house servers for sensitive and confidential data and cloud-servers for data which is not frequently accessed or need the lowest level of latency.

Breaking It Down

It would be great if we could say that one is better/faster/cheaper than the other, but there are many factors to consider. The type of application, business requirements, and many other features come into play.

Regardless of what you choose, it’s important to equip and train your staff with the information and security tool to help them keep their systems, accounts, and your business secure in this digital era.


Renuka Rana

Renuka Rana

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