Once a tech buzzword, “cloud computing” has become the backbone of most of the companies in today’s era. Even if you are not aware, most of the businesses have already moved to Cloud-based PBX, and they have a fair share of reasons for doing that. There is no shock in the fact that 96% of organizations have reported that they use Cloud PBX in one form or the other. Despite being so popular and necessary, there are still many companies that prefer all of their in house technologies to be on-premise. 

This makes you think what exactly is the difference between the on-premise and on-cloud. How can you choose between these two technologies for your business? Well, we will discuss all the necessary points in this article. 

As the industry cannot stop blabbering about cloud computing; using it is a bit complex, and to top it all, there is an overwhelming number of vendors and products available in the market. 

This can be good at first but can get very tricky later. Various factors come into play while you are choosing between on-premise and a Cloud-based PBX environment. For starters, you need to understand your business requirement to tip the scale toward one approach or another. Once you have decided the technology you wish to proceed with the next hurdle is selecting the technology partner, which is quite hectic as there are so many vendors offering services to choose from. 

Now let’s try to understand what these two technologies are and what difference they can bring to your business.

What Is On-Premise Computing?

Popularly known as “on-premise” is a dominant and traditional model of enterprise IT. In this technology, you have to buy your hardware and software. Then the applications and services run on their own IT infrastructure. It is sometimes called “shrinkwrap,” which is the plastic film used to wrap commercial off the shelf software. 

The phrase on-premise is used because the technology is physically located in the company’s property. This location could be the office building itself or a nearby facility. This helps the company to have full access to technology management, monitoring, protection, and arrangement. As the companies are handling everything on their own, they must have personal security license and tech support as well. This is the reason why on-premise computing is suggested for larger companies. They can afford a huge IT budget and skilled IT employees. 

What Is Cloud Computing?

Cloud computing is the opposite of on-premise as it is an enterprise IT model in which the provider remotely hosts the hardware and software. It is further divided into two main types that are public Cloud and private Cloud.

i) Public Cloud: There is a third party involved that is responsible for administrating your business cloud services, software, and storage via the Internet. The company’s data is hosted within the service providers’ remote data center and kept separate from the data of other customers.  

ii) Private Cloud: In this type of system, the company has to take care of the cloud infrastructure. There is a cloud provisioned for the use of a specific organization. In the same way as public Clouds, the software, storage, and services are provided remotely via the Internet. 

When should a company choose on-premises architectures?

Security is a very personal and sensitive matter. Safety is of utmost importance to some organizations than others. Though some sectors have a gut-level reaction to the Cloud, and the decision stops there, period.  



When should a company choose cloud architectures?

Every company wants to have flexibility in terms of the technology they use. The level of flexibility of the technology used should be such that there is time to walk before you need to run. We are developing business demands flexibility. In case a business unit experiences a dangerous seasonal change, a detailed cloud architecture will make it easy for the IT team to move forward productively. 

What are the significant differences between On-Premise and Cloud Computing?

As we have ranted a lot about both the technologies its time, we discuss how these two differ from each other. Which path will lead to a thriving destination depends upon the analysis of the company’s needs and what it is you’re looking for in a solution.  

i) Distribution:

On-Premises: In the case of the on-premise environment, the sources are well distributed within the company’s IT infrastructure. The enterprise is entirely responsible for the maintenance of the solution and all the related processes. 

Cloud: There are different types of cloud computing- public cloud computing and private cloud computing and hybrid cloud computing. Talking about the public cloud computing environment, the service provider hosts the resources on-premises. At the same time, companies can reach the resources and use it as much as they want whenever they need it. 

ii) Cost

On-Premises:  If a company is using on-premise software, they have to take the responsibility of the entire costing of the server hardware, power consumption, and space as well.

Cloud:  If an enterprise chooses to use a cloud computing environment, they only have to pay for the resources they use. They don’t have to take care of the hardware, maintenance, and the costs vary depending on how much their consumption is. 

iii) Control

On-Premises: Every company has its list of requirements that they want to be fulfilled with the technologies they work on. For some companies, security is essential, but some control is primary. In such cases, the on-premise environment is most suitable as the data will remain in full control of the company. The only companies that will hesitate to move to the cloud bases system are the ones who have high privacy concerns. 

Cloud: There is a slight struggle in terms of the Hosted phone system when it comes to controlling. The data and encryption keys stay with the service provider. God forbid if there is mishappening or downtime, you may be unable to access the data in urgency. 

iv) Security

On-Premises: Data is essential for all the sectors, but for some, it is the actual game changer. When you are talking about the banking industry or Government database, everything needs to be a notch more secure. In such cases, the system should be on-premise only. Despite how secure a Cloud-based phone system is but for such unique circumstances, on-premise is always a better option. 

Cloud: Although Cloud is still a better option when it comes to keeping the data secure no matter what the situation is but there have been a few data breaches in the past which may hamper its reputation in the market. 

The threats are real, but if serious precautions are taken, then everything stays under control all the time. 

What are the significant differences between Cloud vs. data center?

A data center is an in-house data storage setup by internal experts. It comprises physical and virtual elements for better management and storage. Cloud computing, on the other hand, is not a physical setup; the service is only available in the Cloud. It is a data storage service that is virtually available, making the Internet mandatory for access. There are many similarities between the two, deciding suitability is a tricky one. As per the general analysis, small businesses with limited capital and other resources should opt for on-demand and subscription-based cloud data centers. And companies that have enough money and resources, whereby they feel the need to exercise complete control and employ high security, should then opt for in-house data centers.

Final verdict

Whether to wish to stay stuck to the on-premise system or you are already drooling over the cloud computing, there is no wrong answer when we are talking about these two technologies. We have been preaching it enough already that it is wholly and solely, a company decided to choose one of these technologies depending on the budget, company size, and affordability. A system architect and business stakeholders must estimate all the tradeoffs when a solution is designed. 

And with the cloud-based system becoming more widespread and its adoption is definitely going to increase much more. 

Don’t follow the market trends blindly. Each company should consider examining its business model before opting for technology like the Hosted phone system or Cloud. At CallHippo, we understand that each company, no matter big or small, has a unique timeline and different goals. That’s why we offer the best technology for our users. Please connect with a CallHippo executive for through and through guidance.

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