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On-Premises vs. Cloud Computing

by Ned Bacheson on March 29, 2012

Much of the recent hype in technology has been related to cloud computing. Innovations in business applications as well as ones targeted to consumers have an element of a service-based architecture.  It appears everyone assumes that “the cloud” is the wave of the future, but this may not be entirely true.  There are many factors that go into whether using cloud computing is right or wrong for your company and/or industry. In this blog post, we will review the following:

Cloud Characteristics vs. On-Premises Characteristics

There are many differences between on-premises solutions and cloud solutions.  Some of the most obvious characteristics include the most biggest difference – how they are accessed.  On-premises solutions are just that, on-premises, installed on a user’s or users’ computers.  Cloud solutions, on the other hand, are accessed via the internet, and typically hosted by a third-party vendor. The second big difference is the “pay as you go” or on-demand usage service model (cloud) versus the traditional upfront capital expenditure (on-premises).  For accounting purposes, counting this on-demand usage as a “utility” versus a large capital expenditure can be very beneficial.  Sometimes this is one of the more enticing aspects of using cloud services—the low cost/low entry point.  Sherpa Software’s President, Kevin Ogrodnik, explored the total cost of ownership of cloud services versus on-premises solutions and arrived at different results than regularly anticipated.

Now, let’s take a closer look at some of the other important but not as obvious characteristics of the cloud offerings that exist.  Customizations are typically administered and managed by the end users.  Cloud providers don’t have the time or bandwidth to work on customizing the service for each of their clients (unless you are willing to pay a premium).  Also, cloud offerings are generally platform neutral (any browser) and clients have the ability to scale resources both up and down as needed (also known as “rapid elasticity”).  Resource pooling is yet another attractive characteristic of cloud offerings, as clients share resources, allowing the cloud vendor to distribute the cost savings to all of its clients (multi-tenancy).

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What Are Some of the Biggest Advantages to Using Cloud Services?

Cloud computing can save your company a lot of up front and on-going IT expenses.  In theory, when compared to on-premises applications, cloud-based services reduce hardware, software and internal IT needs.  The low cost of entry to start using hosted applications and the savings of not paying a large up front capital expenditure are promising reasons to start using the cloud.  Speed of setup and implementation also make moving to the cloud an attractive option to consider.

What Are Some of the Existing Cloud Offerings’ Biggest Limitations?

The most talked about and hyped concern is security.  It is currently one of the most limiting factors in cloud adoption.  In theory, you could be sharing space and services with your biggest competitors.  Do you trust all of your information and biggest trade secrets out there in cyberspace?  Limitations in integrating your company’s existing processes with the cloud could be another factor in migrating.  Custom databases of customer information may not always be easily migrated to the cloud. Availability could be another limiting factor of using a cloud service.  Although rare, there have been reported outages with popular cloud services.  These can certainly be disruptive and depending on the value of the information being accessed, could be disastrous to your organization.  Outages are, of course, not limited to cloud services alone; they could and do occur in on-premises applications as well.  But the resolution of the cloud outages puts you at the mercy of the vendor, which is not always an appealing proposition.

Another important consideration with moving data/applications to the cloud is getting your data back.  Data in cloud applications may be stored in proprietary formats and recovering it generally requires custom service requests, which typically come with additional costs.  For instance, a company recently evaluating hosted email had to pay the service provider over $30,000 to retrieve email from the cloud servers to complete an e-Discovery request.  And that was just to get the data back!  It did not include actually completing the necessary e-Discovery processes. Regulatory requirements also challenge cloud implementations.  For example, laws in certain countries enforce restrictions on the storage of local data outside the country.  So, if you are operating in these countries, you will need to ensure that the location where the vendor is storing the data complies with the prevailing laws and regulations.

What is Sherpa Software Able to Do Related to the Cloud?  What are Sherpa’s Future Plans?

In terms of our cloud capabilities, Sherpa Software is currently able to help organizations prepare for impending email migrations to the cloud from on-premises versions of both Lotus Notes and Microsoft Exchange environments.  Sherpa’s tools provide a way to selectively consolidate, collect and organize the data to minimize the effort required to transition data to the cloud.  This could mean automating tasks such as centralizing all PST data from throughout the organization, even user desktops, to ensure all available data is easily accessible to migrate.

In terms of future plans, the next version of Discovery Attender for Exchange (version 3.8, slated for a 2012 mid-summer release) will be able to selectively download data from IMAP-based email systems (Gmail, for example).  This version will also include the ability to download data from Office 365.  Recall the situation above, where a company had to pay over $30,000 to get their data back from their cloud service provider.  Version 3.8 of Discovery Attender will provide the ability to download this data from the hosted vendor into a PST and search it at a fraction of the cost!  The next versions of Sherpa’s Lotus Notes products (Discovery Attender, Compliance Attender and Mail Attender) will all include cloud capabilities as well.  Mail Attender for Notes will include the ability to archive to the cloud.  Compliance Attender for Notes will allow journaling and “graveyarding” emails to the cloud.  And finally, Discovery Attender for Notes will be able to search these cloud-based archives/journals to complete e-Discovery requests.

In summation, there is no real right or wrong answer in determining if you should move applications to the cloud.  It depends on what is right for your company and your particular situation.  As outlined in this article, there are definite advantages and disadvantages to using cloud-based services.  A general guideline, however, might be that if you do have extensive or complex information management restrictions/regulations, the cloud may not be flexible enough for your situation.  Just because the hype right now is to the move to the cloud, does not mean it is also the right thing for you.  Make sure you do your own research and come to your own conclusions.

Whether you plan to go to the cloud or not, Sherpa Software is here to help and provide more information.  For more information regarding on-premise vs. cloud computing, feel free to contact us.


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