An on-premises data centre is a group of servers that you privately own and control. Traditional cloud computing (as opposed to hybrid or private cloud computing models) involves leasing data centre resources from a third-party service provider.

On-premises data centers definition

“On-prem” refers to private data centers that companies house in their own facilities and maintain themselves. On-prem infrastructure can be used to run private clouds, in which computing resources are virtualized, using technology such as VMware) in much the same way as those of public clouds (however, private clouds can also be run on leased third-party hardware).

An on-premises data center is another way of referring to the classic private data infrastructure used by companies that keep all of their data and servers in-house. In some cases, they may have a dedicated facility for their servers and computing equipment, but more often this infrastructure is located in a dedicated room in an office building. For smaller companies, this room may not be much more than a closet housing a single server or two (hence the term “data closet”).

The advantage of this arrangement is that it allows companies to have full control over their data and who has access to their systems. This is particularly valuable for organizations with valuable, proprietary assets or sensitive customer information that must be handled according to strict compliance regulations. Older companies often have the legacy infrastructure with complicated hardware and network requirements, making an on-premises solution necessary for them to keep these systems up and running without re-engineering them from the ground up with modern architecture.

On-premises vs Cloud Computing

Cloud Computing definition

When people speak of cloud computing, they’re most often referring to “traditional,” or “public,” cloud, a model in which a third-party service provider makes computing resources available for consumption on an as-needed basis. Public cloud is a multi-tenant environment, meaning that these computing resources are shared by multiple individuals or companies, with all data secured by state-of-the-art encryption.

Many organizations make the decision to transition their data and IT infrastructure into a purely public cloud environment (such as AWS). Since moving everything to the cloud eliminates the need to maintain hardware, a cloud migration could potentially result in significant cost savings. However, there are some important factors to consider.

Monthly cloud billing can often fluctuate dramatically, especially if there are changes to service rates or if cloud-bursting services are often necessary. There’s also the risk that committing to a specific cloud provider will set an organization on a path toward vendor lock-in or put them in a difficult situation if the provider suddenly goes out of business. That’s why many companies opt instead for a hybrid cloud solution that provides access to public cloud platforms while storing critical assets in colocated servers.

On-premises and cloud compared

Both on-premises and cloud computing can provide your business with the IT infrastructure it needs. The model you choose will likely depend on the level of security you need in order to meet compliance standards and on the cost structure you prefer. Here’s a look at how the two models compare.

Business need: Data centre single tenancy (for compliance)On-premises: ✔Public Cloud: X
Business need: Highly secure data encryptionOn-premises: ✔Public Cloud: 
Business need: Customisable hardware, purpose-built systemsOn-premises: ✔Public Cloud: X
Business need: Capacity easy to scale up and downOn-premises: XPublic Cloud: 
Business need: Infrastructure requires large, regular investmentsOn-premises: ✔Public Cloud: X
Business need: Pay-as-you-go, usage-based pricingOn-premises: XPublic Cloud: 
Business need: Complete data visibility and controlOn-premises: ✔Public Cloud: X
Business need: Built-in, automated data backups and recoveryOn-premises: XPublic Cloud: 
Business need: Near-zero downtime riskOn-premises: XPublic Cloud: