What is on-premises?

In a nutshell: What is on-premises?

The term on-premises (also often referred to as on-premises) covers all systems that are not cloud-based. For over a decade, customers have increasingly been subscribing to infrastructure, software and other offerings from cloud providers in order to save themselves the effort and costs of setting up their own systems.

 

With on-premises systems, on the other hand, IT resources such as hardware and software are set up and operated independently.

 

On-premises, cloud, SaaS, IaaS and PaaS: what is what?

The counterpart to on-premises is cloud computing. The increasing popularity and use of cloud solutions is what gave rise to the term "on-premises" in the first place. Let's look back to an unspecified point in time, sometime around 2010:

 

• Companies and private users acquire the right to use software. This right is usually permanent (lifetime license) or for a specific period (monthly or annual subscription).
• The software is downloaded or purchased and installed on a data carrier. The software is stored and used on your own end device or in your own data centers.
• There is no alternative to this model. Programs are used on the company's own servers.
• At some point, cloud solutions will enter the scene. Companies and private users can use third-party IT infrastructure to store their own data or use purchased software on it, for example.

 

With the birth of cloud computing, it is clear that a new term is needed. It should describe the previous state in which software was not operated on external servers, but only on one's own. This is how the term "on-premises" came about. A direct translation of the term makes little sense; in German, "on-premises" means "in one's own environment".

 

In connection with cloud computing, there are other terms that can be found in many specialist articles about on-premises and clouds. In particular, the following terms are used to describe cloud services:

 

• SaaS: Abbreviation for "Software as a Service"
• IaaS: Abbreviation for "Infrastructure as a Service"
• PaaS: Abbreviation for "Platform as a Service"

 

Software as a Service (SaaS)

Software as a service refers to the provision of software solutions via the cloud. It is not necessary to install software on end devices, as programs are operated via the web browser.

 

If they are installed on your own end device, as is possible with many Microsoft 365 applications, for example, the programs can be connected directly to the internet. This allows several people on different end devices to work synchronously on a document via the internet connection.

 

With this cloud service, users do not have to worry about maintaining and servicing the applications. Instead, the cloud provider takes on this task and carries out automated updates and optimizations .

 

This is not the case with on-premise software. This is because this software was purchased once and installed on the company's own servers, after which the responsibility for administration lies with the users.

 

Infrastructure as a Service (IaaS)

If the cloud provider provides users with the IT infrastructure rather than the software, this is referred to as Infrastructure as a Service. The IT infrastructure includes computers, hard disks and networks.

 

IaaS can be combined with SaaS, but IaaS alone only refers to the provision of the infrastructure. With this service, customers do not have to worry about the infrastructure, but they do have to worry about the applications installed on it.

 

With an on-premise solution, companies have to provide the entire IT infrastructure themselves. If, for example, the company's growth results in a greater need for storage space, the company has to buy new hard disks and probably even more powerful computers. IaaS therefore has several advantages over on-premises.

 

Platform as a Service (PaaS)

This cloud offering is primarily aimed at developers. They are provided with a complete development environment - either to develop applications themselves or to link the existing applications in the company with the newly acquired cloud services via interfaces. Due to the focus on developers, we will not go into the PaaS offering in more detail here.

 

Differences between on-premise and cloud computing

On-premises solutions and cloud solutions differ in several aspects. The primary difference is the infrastructure: with an on-premises solution, software is installed on the company's own servers. This means that the company has full control over the data, but also full responsibility.

 

In view of the use of software on their own servers, companies must provide sufficient storage space and performance in their on-premises data centers. In addition, the cyber security requirements for on-premises solutions are higher.

 

On the other hand, there is the Software as a Service (SaaS) offering, where the software is operated on the cloud provider's servers.

 

It is true that companies must also take special measures for cloud security with SaaS. However, these are less comprehensive and not as complex as the IT security of on-premises solutions. With SaaS solutions, the cloud provider itself ensures the functionality and security of the software and its data centers.

 

Ultimately, the full responsibility that companies bear for on-premises solutions results in increased costs. There are also additional costs for the expansion and operation of on-premises data centers. Nevertheless, on-premises solutions can be more cost-effective than cloud solutions. Whether this is the case must be discussed on a case-by-case basis. A direct comparison is difficult, however, as many factors have to be taken into account - not just the pure license costs.

 

For companies, full control over data is an important difference between on-premises and cloud computing. Some private users also attach such great importance to data control that they forgo SaaS solutions to protect their privacy.

 

In some countries and industries, certain companies are prohibited from using cloud services for certain purposes. In Sweden, for example, companies in the critical infrastructure sector (such as energy suppliers) are not allowed to store data outside Sweden.

 

Such cases do not completely rule out the use of SaaS solutions, but require individual and legally compliant concepts.

 

As an IT service provider, we at innobit advise numerous companies on digital transformation and the associated technologies such as on-premise solutions and cloud computing.

 

As cloud services generally offer many advantages, we will be happy to advise you individually on how you can meet data protection requirements and other regulations with tailored cloud strategies and at the same time use cloud services to optimize your operational processes.

 

 

Advantages and disadvantages of on-premises

The advantages and disadvantages of on-premises mainly revolve around the aspects of data security and the workload for IT. While data security is generally rated as better with on-premises solutions and is considered an advantage, the effort involved is significantly higher than in cloud computing and is therefore a disadvantage.

 

Advantages of on-premises

In a cloud, the data is stored by the cloud operator. On the one hand, this is already legally problematic; on the other hand, it can also become a problem in terms of security.

 

Let's first look at the legal aspects. Storing data on the servers of a third-party company (because that's what a cloud provider is) is not permitted in some industries. In this case, a hybrid IT and cloud strategy must be chosen in order to store the particularly sensitive part of the data in your own IT environment or in a private cloud.

 

The choice of cloud provider must also take into account the critical aspects of data protection. Fortunately, there are offerings such as Microsoft's Azure Cloud, where data protection standards are even higher than those required by the EU's General Data Protection Regulation (GDPR). Provided that the data protection complies with the legal requirements of the EU, the national states and the industry, the cloud can be used instead of an on-prem solution.

 

Even if the data protection aspects are fulfilled, one risk remains in cloud computing : the security risk. Cloud providers are popular targets for cyber attacks. This is because the large networks of cloud providers offer a large attack surface. The many access points to the cloud must be secured within the company using a tailored strategy and special cloud security measures. However, it should not be forgotten that cloud providers meet very high security standards and invest much more than most companies could do themselves.

 

Even if these access points are secured, it cannot be ruled out that potential gaps will open up for cyber criminals. Companies that have the specialists and financial resources to invest in modern cyber defense technologies will generally be able to protect their on-premise solution just as well as a cloud provider can protect its own systems - with the advantage that small and medium-sized companies are less likely to be targeted by hackers than cloud providers.

 

Disadvantages of on-premise

The biggest disadvantage of on-premise solutions is the associated financial and administrative expense. The purchase of software, servers, hardware and other components of on-premise systems involves high one-off acquisition costs. The systems then have to be continuously maintained.

 

In cloud computing, on the other hand, the acquisition, management and optimization of all system components are included in the monthly fees. When using SaaS, software is rented for a monthly or annual fee. The fee includes all updates and upgrades. This relieves companies' in-house IT departments of a considerable amount of work.

 

Even if the purchase of software for your own on-premises solution appears to be more cost-effective over several years, the one-off high acquisition costs are often not easy for companies to bear.

 

A powerful cloud solution such as Microsoft 365 tools comes with attractive cost packages that include dozens of programs and provide companies with a wide range of options for digitizing and automating their work processes and communication.

 

The many possibilities offered by a cloud solution can only be realized in your own on-premise system with high acquisition costs and enormous administrative effort, which is why many companies use offers such as SaaS.

 

Conclusion: On-premises as an outdated model

The aspect of data protection may be particularly important for some companies. However, this does not change the increasing popularity of the cloud. It offers companies access to hardware and software from cloud providers.

 

In contrast to on-prem, companies benefit from the simple setup of cloud systems and can adapt the cloud solutions to their needs as required. The use of cloud offerings is particularly recommended for steadily growing companies in order to be able to easily scale their own IT to meet increasing demand.