Why Traditional On-Premise Server Rooms Or Data Centers May No Longer Be The Best Fit For Today’s Business

In today’s digital age, the speed of modernization along the lines of Information Technology has been tremendous over the past few years. In just under a decade, the processing power of the mobile phone had already overtaken the desktop computer by leap and bounds. At the same time, the concept of servers and computing has also been evolving throughout these years. Many businesses are rethinking the model of having traditional on-premise data centers and are moving towards the adoption of cloud computing solutions. This rise in demand for cloud computing has led to rapid innovation within this sector and may have caused the concept of having traditional on-premise server rooms or data centers to slowly fade into oblivion. But is that really the case? Are traditional on-premise server rooms and data centers entirely redundant and no longer suitable for today’s business? Read on to find out more!

History Of Servers And Cloud Computing

The very first web server (and basically the concept of the internet) was invented by Tim Berners-Lee in the late 1980s / early 1990s, and was hosted internally at CERN. Servers have come a long way since then due to innovations and the world’s digitization. Cloud computing is on the rise and becoming the new norm because of the advantages it brings to enterprises and the businesses at large. Even though not all functions of a data center can be replaced by cloud computing solutions, more businesses are adopting it, and some even fully migrating to it, which renders the question, are traditional data centers becoming obsolete? 

Explaining whether traditional data centers are obsolete in modern enterprises cannot be put across effectively without discussing the benefits of cloud computing. Let us look into the differences between a traditional on-premise data center vis-a-vis a cloud based solution.

What Is Cloud Computing And What Is An On-Premise Data Center?

Technically, cloud computing doesn’t mean that no physical data centers are involved. Cloud computing can be considered an abstract re-invention of a traditional on-premise data center. In cloud computing, data is still stored in a physical data center, just that this data center is usually located very far away from the user’s end and is usually managed by the cloud computing service provider, rather than your in-house IT team. However, in some cases, big organisations, especially those MNCs with bases that span across continents, may also have implemented their own in-house Cloud Computing Solution that is managed by their own in-house IT team as well.

Regardless, in all these cases, these data centers are located away from the physical office premises, and workers can conveniently access the required files remotely, usually by tapping on the internet via an encrypted route. In the case where the cloud computing solution is provided by an external third party vendor, the vendor will be responsible for all the management and maintenance work of the data centers. And more often than not, they have multiple backup servers in various locations which are geographically far from each other to ensure system redundancy. This helps to ensure that your data is protected from all kinds of situations; system failures, power outages or even disaster scenarios.

A traditional on-premise data center means that the infrastructure is located within the company’s premises itself. Typically, the workers will access and store data via the company’s intranet network, though it is different from case-to-case.. And service provision to the end users are covered by the company’s in-house IT team. All operational and maintenance costs are also entirely incurred by the company itself. 

These are 2 very different solutions, each with their own pros and cons. To determine if traditional server rooms are still applicable in today’s context, let’s consider various factors that may shed some light to the comparison..

Factors For Consideration: Cloud Computing Vs On-Premise Data Center

1. Scalability

Traditional on-premise data centers can be a little troublesome in this aspect because to scale up or down, it may mean weeks of paperwork and even months of physical installation / removal. There is a lot of consideration that goes into the costs of buying new equipment, repairs, maintenance and even paying and training employees to operate the new equipment. Cloud data centers, on the other hand, maximise the ability of a company to meet the growing demand of a business. The ability to alter bandwidth allocation, storage capacity, and IT resources without the space restraints are some of the things one gets to enjoy with a cloud data center. When business is low, it would be financially wise to scale down to remove unnecessary expenses, and when business is high, the option to increase the latter to match operating demands makes for a very viable and efficient strategy in tackling situations as it develops. 

2. Flexibility

Riding on the fact that Cloud Computing solution has a much higher scalability, it also comes together with the advantage of flexibility; that is having the option to increase and decrease usage of data center capacity. Traditionally, a company requires a good estimate of the amount of servers that they require to ensure that they have the right amount of physical space set aside in their compound. In addition, they would also require a team of IT personnel to run and maintain these equipment. This opens up problems that are related to Human Resource (HR) and the wear and tear of equipment. With a Cloud Computing solution, these considerations are all bourne and taken care of by the third party provider that hosts these cloud computing servers. This can provide the company with a lot of flexibility in adapting in accordance to market demands. For instance, when the COVID 19 pandemic came, most companies were forced to work remotely. Those that relied on on-premise data centers had a harder time adjusting as they could not adapt to the changes quickly. In some cases, there was hardly any work done at all. Many businesses also found that they were not able to downscale their operations when required, leading to wastages in expenses. Some companies had to shut down because they simply could not afford to upkeep the momentum they had before the pandemic struck. Those that had embraced cloud computing had a relatively easier time making the adjustments because they were still able to access the company’s files remotely and while continuing to keep their business data secure. 

3. Cost

Operational and maintenance costs for an on-premise data center are high and at times more uncertain due to unexpected circumstances such as breakdowns, power outages etc., as opposed to that if the cloud computing solution was adopted, where the only thing the  business had to worry about is whether the bills for the cloud computing solutions were paid on time. In addition, there are additional costs such as opportunity costs for the space used, salaries for IT maintenance staff and insurances for the in-house data center which may add up to be a substantial amount. Cloud computing service providers are also able to leverage the economies of scale of having multiple clients, and are able acquire and maintain equipment in bulk. Therefore they have favourable rates, and may be able to pass on these cost savings to the clients, and offer them a competitive rate. Cloud computing also cuts costs by reducing redundancies required for in-house solutions such as alternative hardware that keeps the data center running in case of a system failure. These costs will all be borne by the third party provider, therefore minimising costs incurred by the business.

4. Security

Some people may have the impression that Cloud Computing is less secure than on-premise data center. The reason being that traditional on-premise data centers are kept separated and disconnected from the internet and hence, it is not vulnerable to cyber attacks over the internet. There are two schools of thought over this issue and it is likely that there is no right answer for this question. For people who think that traditional on-premise data centers are more secure because you will then be able to have full control over the access to the physical servers, opponents use the same point to argue that it is precisely so that makes it so much less secure. On-premise data centers mean that all security measures are implemented on the premises of the organisation, which means constant monitoring and maintenance are required to be fulfilled by the organisation themselves, who may not necessarily be the best experts in the field of  cyber security. Whereas in the case of the security for cloud computing premises, they usually have a dedicated team of expert workers who are ensuring the security of the cloud computing software and hardware components  Therefore, they have far more experience and knowledge enforcing the security of your data.

However, with the great conveniences also comes a certain level of risk. Storing your files on the cloud can indeed still open you up to risks such as data loss, insecure interfaces and APIs, technology vulnerabilities, account hijacking etc. Therefore, before choosing your cloud service provider, make sure they are reliable and reputable, so that you will be assured of the security of your data, as well as the ability to recover them if anything goes wrong.

5. Accessibility

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This factor for consideration is probably one of the strongest cons that adoption of cloud computing solutions have over the argument for continuation of usage of traditional on-premise data centers. When you have your own on-premise data centers, you have your own physical server rooms, which  gives you complete control over it and allows you to modify the system on your terms and accommodate the shifting needs of your business. It also gives you full control over the security of your network and the premises at large. Whereas for cloud computing, the company can only access and have very limited control over what the service provider offers. There are many more limitations in what you can do by yourself. You would have to communicate your needs to the cloud service provider and if they did not have those services, you’d have to either accept the limitations or look for another cloud service provider if you are not satisfied. For instance, in an on-premise data center, you would be able to customise your security measures as you see fit, maybe have different key cards for each level of access hierarchy, or maybe installation of biometrics access for key sensitive data. But with a cloud service provider, the security measures they have in place are a “take it or leave it” type of deal. You cannot really customise them to your own terms; what you can get is all that they can offer.

Where Do We Go Moving Forward?

While we understand that adopting a full cloud computing strategy has its own drawbacks, sole dependency on traditional on-premise data centers in the name of physical security is no longer a strong and valid argument anymore. If firms still want to retain the benefits of having its own on-premise data center, a hybrid cloud computing strategy can be considered as well, so as to enjoy the best of both worlds. 

The migration from an on-premises data center to a cloud computing data center doesn’t mean moving everything to the cloud. It allows you to retain components of an on-premise data center while still enjoying the benefits of a virtual data center. Efficiency will also be improved since the limitations of on-premise data centers are supplemented by the cloud computing solution. For example, when a business has been met by the need to scale up beyond the capabilities of the on premise data center, they can take advantage of the cloud to scale up therefore saving time and costs of purchasing new equipment.

Many companies have actually already adopted hybrid cloud data centers which have a mix of on-premises data center components and virtual data centers components. In the diagram below, we can see the varying degree of outsourcing and data migration that companies can adopt based on their own needs and preferences. 

<Diagram provided by Vallous>


As the traditional on-premise data centers and server rooms are slowly making way for the new and modern systems, it is clear that the modernised data center will definitely bring about many benefits. More and more companies are hopping onto the bandwagon and choosing to incorporate cloud computing solutions to fit their business demands, so as to remain robust and competitive in the marketplace. 

Although Cloud computing requires the inherent exposure to the internet (which does pose security concerns to a certain extent), the improvements in security levels over the recent years and the convenience and cost effectiveness of cloud computing has shined through the challenges as more and more people are adopting this new strategy of computing.

With more cloud solutions set to be available in the near future, with various options to satisfy the varying requirements of the customers, coupled with the numerous benefits and pros of using cloud based computing,  it is certain that the future of computing is slowly driving towards the utilisation of the cloud based systems.

Most importantly, organisations should engage a trusted partner and consultant that can provide expertise in the migration and utilisation of these cloud computing solutions.If you are unsure on where to begin, or would like to seek professional expertise to assist and guide you on this journey, consult the leading experts from Vallous today! We will provide you with a complimentary, non-obligatory consultation and proposal of a personalised solution based on your business needs and your existing infrastructure (if any). So what are you waiting for? Click on the button below to book your FREE consultation with our experts NOW!