On-Premise vs. Cloud Servers: What Are the Differences?

For many people, navigating between IT products and services can feel like a labyrinthine effort. At Windows Management Experts, we are committed to meeting you where you are to customize an IT solution that works for your business, and make sure you understand the capabilities of your investment. 

One of the most common questions we get from small- and medium-sized businesses is, “What are the differences between on-premise and cloud servers? Which one do I need?”

While there isn’t a one-size-fits-all answer, a fundamental understanding of the options will help even non-technical decision makers know what they’re investing in.

All data needs to be hosted on a server. There are both on-premises (physical) servers, and cloud servers to choose from. Within cloud solutions, there’s also a hierarchy of options you can license depending on your company’s needs. 

On-Premise Servers

On-premises servers are exactly as they sound—you have all the machinery and storage racks onsite at your business, typically in a server closet or room.

With on-premise servers, you are responsible for configuring the security, networking, middleware, backup protocols, operating systems, applications and data management, and everything else required to keep the server running. While physical servers will require more upfront capital in the short-term, your connection to the data is completely independent from an internet connection, so if your office loses internet service or is experiencing slow speeds, your servers are not affected by this delay. Scaling your server capacity requires more physical space to store more physical servers. 

The Cloud as a Service

Cloud hosting on the other hand relies on a virtual server hosted somewhere entirely different from your offices. Cloud-hosting companies still have substantial real estate invested in holding the servers they are licensing you access to, but the cloud-hosting company is responsible for maintenance and downtime. In addition, cloud solutions are incredibly cost-effective and easy to scale up or down as your business needs may change. 

There are several variants of cloud servers, which offer differing capabilities and customization. 

IaaS (infrastructure as a service) provides you with cloud-hosted virtual machines (VMs) on which you must install Windows, SQL, Sharepoint and beyond. Your IT staff is in complete control over the administration and customization of the cloud VMs, the servers are not in your office space, and you access and store data on the servers via a dashboard or API (application programming interface). Azure is an IaaS solution. 

SaaS (software as a service) hosts offer a fully managed solution with somewhat limited control of administration and customization. SaaS solutions refer to cloud-based software that is hosted online by a different company, is available for purchase on a subscription (or licensing) basis, and is delivered to machines via the internet. SaaS products are one of the most common cloud-computing solutions used by small- and medium-sized companies today, for their ease of use and scalability. Additionally, SaaS products don’t need to be downloaded and installed on individual devices in order to deploy to an entire team or organization, which is especially helpful in a distributed work environment. Office 365 is an example of a SaaS product. 

PaaS (platform as a service) is a complete development and deployment environment in the cloud. PaaS offerings include the infrastructure (servers, storage, and networking) but also include middleware, development tools, BI (business intelligence services), database management systems, and more. Microsoft Power Platform and PowerApps are an example of a PaaS offered by Microsoft. 

Choosing the Right Solutions

Some businesses opt for a hybrid solution, utilizing the best of both on-premise and cloud servers. When configuring this sort of deployment, it’s important to work with experienced professionals, often outside your company. While your IT department may be capable in their roles and familiar with your business’s relationship to servers, it’s always a good idea to let infrastructure experts advise you on the big picture. After all, the experts are staying up to date on all the latest advances in the field, so your employees can focus on your company’s success.

If you or your team need more information about IaaS and SaaS solutions offered by Microsoft, contact Windows Management Experts. WME offers workshops and planning sessions to go deeper into the use and deployment of IaaS solutions, as well as tiered service levels for SaaS solutions and managed services. Contact us today to learn more.


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Matt Tinney

Professional IT executive & business leader having decades of experience with Microsoft technologies delivering modern-day cloud & security solutions.

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