The Cloud Versus On-Prem, That Is the Question

cloud computing

One of the first marketing/technology terms that I learned when I joined a video managed services company in 2008 — versus previously working at a telecom company — was the difference between a cloud-based service (not a weather system) versus on-prem (aka on-site) hardware products. I currently work for a digital signage company that provides both cloud SaaS (single or multitenancy) and on-prem (as we have clients that use either solution). We even occasionally provide a hybrid, where we combine cloud services and utilize some of the clients’ on-prem equipment.

Cloud computing differs from on-premises hardware/software in at least one critical way. An end-user company hosts everything in-house in an on-premises environment (could be more than one location). In contrast, in a cloud environment, a third-party provider hosts all that for you. In other words, a cloud-based server uses virtual technology to host a company’s applications off-site, typically at co-location facilities with multiple redundancies for power, data, equipment and human resources.

What Is Cloud Computing?

According to the cloud computing Wikipedia page, “The goal of cloud computing is to allow users to take benefits from various technologies, without the need for deep knowledge about or expertise with each one of them.” The cloud’s purpose is to cut costs and help end users (who could be from a number of different departments) focus on their core business. The Wikipedia article also explains, “The main enabling technology for cloud computing is virtualization. Virtualization software separates a physical computing device into one or more ‘virtual’ devices, each of which can be easily used and managed to perform computing tasks.”

Virtualization both creates a scalable system of multiple independent computing devices and speeds up IT operations. All that said, there are a few reasons why end users should choose to embrace cloud-based solutions rather than on-premises ones.

Is the Cloud Right for You?

Based on my experiences, there are a number of reasons why end users should embrace cloud-based solutions:

  1. Typically, charges for cloud services are lower than similar services for on-prem. As the cloud-based provider has control of its distributed servers in its global co-location facilities, it can identify, evaluate and implement options to resolve issues remotely rather than traveling on-site and going through the same process and losing a lot of time.
  2. Adding more features to cloud-based services is faster and more efficient than (again) going on-site to access a client’s on-premise equipment. In addition, access to services remotely has increased exponentially since last year.
  3. I have found that engaging with clients and providing them with ongoing cloud-based software and service, led to a longer and stronger relationship as my team provided ongoing support for those services. So, rather than selling one-time equipment sales (every five-plus years), I was engaged more often with clients; there were more opportunities and reasons to discuss how I could help them with other cloud-based software and services as well.
  4. As we all have recently discovered, many people are getting used to working and accessing information remotely. So, their expectations have changed to being able to resolve issues without having to travel to their data closet every time there is an issue.
  5. This document was written via cloud-based software; in fact, I typically share information with my associates, partners and clients, especially large-sized files (which is typical in my digital signage environment). So, in the past, you would save a Word document and send it to a colleague for feedback (and back and forth). By using cloud-based tools, you are given access rights to the same shared document, you can both simultaneously work on an article, diagram, document, etc. Although not necessarily needed once a document has been shared, I typically click on the share button and my associate(s) receive an email with an invitation to edit that shared document which is located on a virtual server “in the cloud.”
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The company I work for was recently working with one of our integration partners on a project for a financial services company and we naturally started with a discussion about our on-prem solution. One of our larger financial clients will only use on-prem equipment, so we were used to that type of conversation. However, as we performed a demonstration of our CMS (along with our automation capabilities) and reviewed more details on our software and media players, we decided on mentioning our cloud-based solution as well.

We discovered a recent shift in this client’s thought process and methodology about cloud-based services, as they moved in that direction with other vendors for other projects. As time went on, we were getting engaged directly with their InfoSec team, whose purpose is to “use tools designed and deployed to protect sensitive business information from modification, disruption, destruction and inspection.” It was interesting to read the emails back and forth between their team and mine. As time went on, the client seemed to be comfortable with our methodology to support their signage initiative.

Security Concerns?

I believe that years ago, on-prem security protocols for each company’s firewall on their network were stricter (i.e. locked down) than they were for cloud-based services (i.e. over the internet). However, I will note that the security process for cloud-based software and services has been further developed so although hacking is still possible, the cloud is more secure now than years ago.

Software-as-a-Service (SaaS)

So, where does SaaS fit into all this? The National Institute of Standards and Technology defines Software-as-a-Service as:

“The capability provided to the ‘end-user client’ is to use the provider’s applications running on a cloud infrastructure. The applications are accessible from various client devices through either a thin client interface, such as a web browser (e.g., web-based email), or a program interface. The end-users do not manage or control the underlying cloud infrastructure including network, servers, operating systems, storage, or even individual application capabilities, except for limited user-specific application configuration settings.”

The pricing model for SaaS applications is typically a monthly recurring charge (MRC) or yearly recurring charge (YRC). There may be a nonrecurring charge for a configuration or setup fee. Prices become scalable and adjustable if users or players are added or removed at any point. SaaS can help reduce IT operational costs by outsourcing hardware and software maintenance and support to the cloud provider. Examples of applications offered as SaaS are digital signage, games and productivity software like GDrive and SharePoint.

In the digital signage area, clients can access our CMS (much like others) anywhere in the world that they can connect over the internet (but they do need consistent and reliable bandwidth) by clicking on the CMS URL in their web browser and inputting their login credentials (login and password). Once they have the CMS running, they can check the status of equipment (that is on-site), create user groups, look at reports on changes to the CMS, add content, create layouts/campaigns and change schedules, without having to be on-site anymore. I have done a number of demonstrations of my CMS from various locations including my home office, work office, hotel room (while on vacation), sitting in a parking lot (while waiting for another meeting in a restaurant) and other locations while sharing my screen over VMR using cloud-based video software, such as Google Meet, Microsoft Teams, Pexip, Ring Central, Webex and Zoom.

I hope this general overview helps you understand the value of Cloud-based software and services over On-Prem products and services.

Here is the next list of helpful terms and definitions I’ve collected over the past few weeks.