Cloud vs. Data Center: Which Is Right for Your Business? (2022)

Cloud vs. Data Center: Which Is Right for Your Business? (6)

(Video) Data Center vs Cloud | Comparing Cloud Benefits

Businesses rely on data for just about everything they do. No matter the industry, access to real-time data is necessary to make decisions, identify patterns of behavior, determine root cause analysis, and so much more. So as a business leader, you need to ask yourself where will all of this data will live—in the cloud or in an on-premises data center? Both options have their advantages, and they both have their drawbacks. The question can only be answered by looking at the pros and cons of each to determine which is best for your specific scenario.

Cloud vs. Data Center: Getting to Know Them

The main difference between the public cloud and a data center is where the data is stored. In a data center, data is most often stored on the premises of your organization. Some data centers may be in locations not owned by your organization—in this case, your data center is colocated, but not in the cloud. The cloud is completely off premises and your data is accessible from anywhere via the internet.

Gartner expects that the public cloud market will grow to $266.4 billion in 2020. Despite these numbers, there are still reasons why an organization would choose to rely on their own, on-premises data center. The analysis below will provide a more complete look at the cloud versus data center debate.

The Data Center

An on-premises data center is a server, or a collection of servers, that you purchase and keep on site to serve your data storage needs. Some people see this as a disadvantage; you have to purchase the server hardware along with networking hardware. Like any technology, it will age and need to be replaced. Along with the cost of purchasing all of this equipment, you will also need to hire a staff to configure, customize, manage, maintain, and secure it all. These staff members need to be highly trained and keep their skills up to date.

Finally, some people see this model as limited when it comes to scalability. Sure, you can always buy more hardware, but it takes time to bring additional servers online, and that time lost may affect your business.

(Video) Data Centre Fundamentals and Cloud Storage Explained

Reliance on a data center is not all bad; there are a number of advantages to this model. For one, you have complete control over your data and equipment. No one, other than the people you allow, will have access. Because you own the equipment, you also control exactly what hardware and software you are using, making customizations much easier because you don’t need permission from a vendor. Finally, if you are running any legacy systems, you can set up an environment that will cater to these solutions. This gives you flexibility when it comes to migrating to a newer system on your own terms.

The Cloud

In a cloud-based solution, you store your data on someone else’s hardware and infrastructure. Many people are concerned about the idea of giving up so much control. Even though employees at reputable cloud hosting vendors undergo background checks, some companies just aren’t comfortable with someone else handling and possibly accessing their data.

Security is also a concern with the cloud-based option. Even though your vendor is storing your data, you are still ultimately responsible for protecting it. If data is compromised, you will be the one who winds up paying the price. There are companies that feel that if they are going to be responsible, then they are going to be the ones to take on the responsibility of security. Additionally, there is the issue of accessibility. If your internet connection goes down, you can’t access your remote data stores, and for some, that can be a big problem.

Ironically, security is also seen as an advantage of cloud-based hosts. Reputable vendors hire highly trained, experienced staff members to make sure that everything is configured properly, constantly maintained, and adequately secured.

Other benefits that are associated with cloud-based data are cost and scalability. Because you aren’t laying out any up-front costs to purchase hardware and infrastructure that will be outdated, you see instant savings. Also, with cloud computing vendors, you only pay for what you need, so you don’t have servers sitting dormant and waiting to be put to use. This leads into the scalability argument. When you need additional space, it is readily available. It may cost a bit more, but it is there when you need it. Likewise, if your data storage needs scale back, your usage costs will be reduced.

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Cloud vs. Data Center Myths Debunked

Knowing the advantages and disadvantages of each option will help you understand which choice may be better for you. However, not everything that comes up in the cloud versus data center conversation is based in fact. Let’s take a look at some common myths.

The cloud is not secure.

This is one of the most pervasive myths surrounding the cloud and was one of the biggest obstacles during the early days of cloud adoption. People assumed (incorrectly) that because data or services were moved to the cloud, the cloud was less secure because other people would have access to it. Nowadays, most people realize that this isn’t usually accurate.

Most cloud providers actually do a better job than data centers when it comes to security because they have experts who handle the security, management, and maintenance of the servers and infrastructure used.

Data centers are too expensive to operate.

The cloud has the ability to be cheaper and can work better, but this isn’t always the case. You won’t always get the same level of service from one vendor that you would from another. Additionally, costs for using cloud services fluctuate based on time of day, usage, and other variables. So although moving to the cloud is cost-effective for some businesses, others may rack up unnecessary costs—especially if a migration to the cloud is not planned properly or if they require a large amount of bandwidth.

Cloud migrations and data consolidation are difficult.

Migrating to the cloud requires a lot of moving parts— so many that people often think this type of move is an extremely difficult one. However, this is another myth that isn’t 100 percent accurate. Yes, there are enough horror stories about cloud migrations gone wrong that it makes sense to think twice about considering such a move. Yet often, the difficulties that arise could have been avoided if the organization took the right steps to plan the migration properly.

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All mission-critical applications need to run in a data center.

Some people are still under the impression that all mission-critical applications need a dedicated administrator on site who will ensure availability and security. True, uptime is vital for these solutions, but you have to ask yourself if your team is capable of maintaining the same level of service that your cloud provider will.

A reliable cloud partner will provide a service-level agreement that will likely meet or exceed what an internal team can provide because that cloud partner is dedicated to maintaining the services. There are plenty of reasons to keep mission-critical applications in your own data center, but they are not necessarily any more secure on-premises than in the cloud.

So Which One Wins Out?

Unfortunately, there is no easy answer to this question. The best option is the one that will help you achieve your business goals with the resources you have available. In some cases, your current IT team might prevent you from exploring one option over the other. This is a common problem with small IT staffs; they just don’t have the experience and expertise to handle some of the tasks associated with migrating to the cloud or running an on-premises data center. Your team may not even be able to tell you which option is better for your organization.

This is where a trusted managed services provider can help. You can count on their deep bench of well-trained, experienced professionals to help you decide which solution is best for your organization and then help plan, implement, train, manage, and support your project.

Cloud vs. Data Center: Which Is Right for Your Business? (7)

(Video) 🎯What is DATA CENTER | Data center vs Server vs Cloud☁

FAQs

Which is better cloud or data center? ›

The scalability of the cloud required less amount of investment. The scalability of Data Center is huge in investment as compared to the cloud.

Why data center is better than cloud? ›

Accessibility: In an on-prem data center, the organization has complete control over the systems that it deploys and uses. In the cloud, the organization is limited to what is offered by the service provider.

Is cloud computing good for businesses? ›

Cloud computing facilitates team collaboration

When your teams can access, edit and share documents anytime, from anywhere, they're able to do more together and do it better. Cloud-based workflow and file sharing apps help teams make updates in real-time and gives them full visibility of their collaborations.

Is data center the same as cloud? ›

The main difference between the cloud vs. data center is that a data center refers to on-premise hardware while the cloud refers to off-premise computing. The cloud stores your data in the public cloud, while a data center stores your data on your own hardware.

What is the future of data centers? ›

Because data is increasingly consumed and produced at the edge, future data centers will serve more and more devices at the edge: data closets in retail stores and on factory floors, street furniture in smart cities, parking sensors, video surveillance and self-driving cars.

Is data center more secure than cloud? ›

The truth is that public cloud can be more secure than your own data center. Think about it: Top cloud providers like Microsoft Azure, Amazon (AWS), and Google (GCP) need to make their data centers as secure and reliable as possible because they host workloads for hundreds of thousands of customers.

Why do companies need data centers? ›

A data center is a facility that centralizes an organization's shared IT operations and equipment for the purposes of storing, processing, and disseminating data and applications. Because they house an organization's most critical and proprietary assets, data centers are vital to the continuity of daily operations.

Do you need a data center for cloud? ›

While cloud companies have their own data centers, organizations often have their own data centers as well, which are referred to as on-premises or on-prem for short.

Will data centers become obsolete? ›

Data centers have a finite lifespan. They can also be successfully reinvented. There comes a time in the life of every data center when its owner faces a stark choice: update, repurpose, or unload the facility. In 2019, Gartner predicted that by 2025, 80% of enterprises will shut down their traditional data centers.

Why should I move my business to the cloud? ›

It enhances security: when you move your business to the cloud, your sensitive data is stored off-premises rather than on desktop and laptop computers. If one of your company's computers is lost or stolen, you can still access your data, and you can remotely wipe data to ensure it isn't compromised.

Why businesses are choosing cloud? ›

Cloud computing provides unrivalled scalability through additional storage space, computing power and virtual resources whenever a business needs it. Because businesses only pay for the resources they actually need, they can scale up or scale down quickly, easily and cost-effectively.

What are the negatives of cloud computing? ›

Disadvantages of cloud computing
  • data loss or theft.
  • data leakage.
  • account or service hijacking.
  • insecure interfaces and APIs.
  • denial of service attacks.
  • technology vulnerabilities, especially on shared environments.

How do data centers make money? ›

How do data centers make money? Data center operators make money by leasing or licensing power and space.

What is the difference between private cloud and data center? ›

To begin with, the infrastructure of a private cloud does not require any additional physical space because it is an entirely virtual system. The data center's physical infrastructure takes up a certain amount of space within the organization's main facility.

Who is the largest data center provider? ›

Top 11 BEST Data Center Companies | Datacenter Services In 2022
  • Comparison Of The Best Data Center Service Providers.
  • #1) Equinix.
  • #2) Digital Realty.
  • #3) China Telecom.
  • #4) NTT Communications.
  • #5) Telehouse/KDDI.
  • #6) Coresite.
  • #7) Verizon.
25 Oct 2022

Who needs datacenter? ›

Any entity that generates or uses data has the need for data centers on some level, including government agencies, educational bodies, telecommunications companies, financial institutions, retailers of all sizes, and the purveyors of online information and social networking services such as Google and Facebook.

How long do data Centres last? ›

The timescale of 3 -5 years is given as a guideline as any time over that will risk system failure. Other forms of electrical equipment such as UPS batteries and networking gear will typically be used for a similar amount of time.

Which industries use data centers? ›

Such data centers are extremely beneficial for industries that need data processing in real-time such as autonomous vehicles, telemedicine, telecommunication, OTT platforms, and smart wearables.

Why is AWS cloud often more secure than customers own data centers? ›

Network segmentation helps the cause

A huge security advantage the cloud has over on-premises servers and infrastructure is segmentation from user workstations. The most common way attackers get into networks is through phishing and email-borne threats. The attacks almost always enter through user workstations.

How can I make my cloud more secure than my data center? ›

How to Make Cloud More Secure Than Your Own Data Center
  1. Establish a Strong Identity and Access Management (IAM) Discipline.
  2. Establish and Enforce Cloud Infrastructure Configuration Standards. ...
  3. PaaS.
  4. Implement Continuous Cloud Security Posture Management.
  5. Establish Pervasive Visibility and Monitoring.
  6. Secure the Workloads.
9 Oct 2019

Is cloud computing safer or riskier? ›

Here's some reassurance, though: Information stored in the cloud is likely to be more secure than are files, images and videos stored on your own devices. Why? Cloud companies often rely on far more robust cybersecurity measures to protect your sensitive data.

Do all companies use data centers? ›

Almost every modern business and government offices need their very own data center, or they may opt to lease one. Big corporations and government institutions may choose to build and manage them in-house if they have the resources. While others choose to rent servers at 'colos' or colocation facilities.

Which cloud is used most? ›

Amazon Web Services (AWS), the cloud computing service of Amazon.com, is the largest cloud service provider globally. From its data centers, the business provides over 200 fully featured services including compute, storage, and database.

What are the benefits of using a cloud provider over an on-premise data centre? ›

Why is cloud better than on-premise? Dubbed better than on-premise due to its flexibility, reliability and security, cloud removes the hassle of maintaining and updating systems, allowing you to invest your time, money and resources into fulfilling your core business strategies.

How many servers does a data center have? ›

On the lower end, a small, in-house data center could somewhere near 1000 servers. Most data centers are quite large, however, and a more typical number is close to 100,000 servers.

What are two advantages of using cloud computing over using traditional data centers choose two? ›

Apart from these, some more Cloud Computing advantages are:

Fast and effective virtualization. Low-cost software. Advanced online security.

Is cloud killing data center? ›

Still, others believe that the cloud will not entirely kill the data center, but instead will transform it. Although cloud services will play a key role in how companies deliver core applications and services, there are still reasons for data centers to exist.

What will replace data centre? ›

Public cloud-based services are becoming more predominant as data centers transition from private to public cloud infrastructure.

Are data centers a good investment? ›

The reason: Experienced investors perceive data centers as one of the best ways to make money. Investors see a compelling opportunity to gain strong returns by investing in the infrastructure to power the digital economy, a sector with “extremely positive fundamentals,” according to CBRE.

When should you not move to the cloud? ›

If you are using applications or crunching data that demands a lot of bandwidth or running an environment that requires a lot of IP addresses, a local system could be much faster than doing it over a cloud-based one.

Is moving to the cloud worth IT? ›

Because it doesn't require on-site infrastructure, cloud hosting offers a more cost effective solution in addition to better security and improved reliability.

Which is the number one reason businesses are switching to cloud computing? ›

There's no Need for a Backup Plan

In the past, computing systems would need backup plans for large amounts of data. Understandably, a company will suffer a financial loss if there's no backup storage and disaster strikes. When storing data in the cloud, you don't need any such means to back up your data.

What are the 3 common reasons to use the cloud? ›

Let's look at some of the most common reasons to use the cloud.
  • File storage: You can store all types of information in the cloud, including files and email. ...
  • File sharing: The cloud makes it easy to share files with several people at the same time. ...
  • Backing up data: You can also use the cloud to protect your files.

For which businesses would cloud computing be best suited? ›

Cloud Computing is best suited for a variety of businesses.

In the sense all those businesses who have data, need a place for storage / computation and desire not to build or maintain their own infrastructure.

Why cloud computing is the future? ›

Cloud technology allows businesses to scale and adapt quickly, accelerating innovation, driving business agility, streamlining operations and lowering costs. This will not only help companies get through the current crisis, but it could also contribute to improved, long-term growth.

Who controls the cloud? ›

The simple answer is, though you own the data and files you create, while you use a cloud service for data storage or hosting, you are handing it over to the service provider, and the provider is in its ultimate control.

Is IT profitable to run a data center? ›

It's not a profitable investment.

In fact, racks and enclosures depreciate even more quickly than your auto investment. If you invest in the newest cutting edge technology for your new data center today, it will be worth considerably less tomorrow–and it's only going to depreciate more as time goes on.

How much does IT cost to start a data center? ›

As a general rule, it costs between $600 to $1,100 per gross square foot or $7 million to $12 million per megawatt of commissioned IT load to build a data center.

How much land do you need for a data center? ›

How many buildings can be fit on the parcel? An acre/critical MW ratio of 1:1 is a good general guide to help find out if your property is large enough to meet the capacity requirements of the tenant or independent operator.

What is the difference between on-premise data centers and cloud computing? ›

An on-premises data center is a group of servers that you privately own and control. Traditional cloud computing (as opposed to hybrid or private cloud computing models) involves leasing data center resources from a third-party service provider.

What is the difference between a data center and cloud computing Cisco? ›

For Cisco, cloud data centers are those with higher levels of virtualization, standardization, automation, and security than traditional data centers. "Cloud data centers offer increased performance, higher capacity, and greater ease of management compared with traditional data centers.

What is the best example of private cloud? ›

HP Data Centers, Microsoft, Elastra-private cloud, and Ubuntu are the example of a private cloud.

Does Apple own data centers? ›

Does Apple Have its Own Data Centers? Apple has its own data centers, dedicated to meeting the company's varying performance, privacy, regulatory, and security requirements. In addition, Apple utilizes third-party colocation services, whereby it is often one of several customers utilizing a single data center.

Does AWS own data centers? ›

In total, Amazon Web Services (AWS) operates over 125 physical data centers in various global locations, with these facilities comprising over 26 million square feet.

Does cloud computing require data center? ›

While cloud companies have their own data centers, organizations often have their own data centers as well, which are referred to as on-premises or on-prem for short.

What is the future of the Philippine data center market? ›

According to Research and Markets, the APAC data center hub market will see at least USD 94 billion in investments by 2027, with a compound annual growth rate (CAGR) of 6.30% from 2022 to 2027.

How data center is related to cloud computing? ›

Data centers are an important part of cloud computing because they provide the storage and processing power that is necessary for businesses to run their applications. A data center can be used to support public, private, or hybrid clouds.

Why do companies need data centers? ›

A data center is a facility that centralizes an organization's shared IT operations and equipment for the purposes of storing, processing, and disseminating data and applications. Because they house an organization's most critical and proprietary assets, data centers are vital to the continuity of daily operations.

Will data centers become obsolete? ›

Data centers have a finite lifespan. They can also be successfully reinvented. There comes a time in the life of every data center when its owner faces a stark choice: update, repurpose, or unload the facility. In 2019, Gartner predicted that by 2025, 80% of enterprises will shut down their traditional data centers.

What are the four main types of data centers? ›

Data center needs vary depending on their structure, physical limitations, density requirements and more. Here are four common data center types including onsite, colocation facilities, hyperscale, and edge data centers, as well as their use cases and industry trends.

How many data centers are there in the Philippines? ›

There are currently 1 providers and 1 data centers in Philippines.

Does the Philippines have a data center? ›

The Philippines logged one of the highest growth rates as an emerging data center market alongside Malaysia and Thailand. As the home of the second-largest subscriber base in the region, 'hyperscalers' are motivated to build their technology and communication infrastructure throughout the archipelago.

Why are data centers considered a thriving property segment in the Philippines? ›

Over the past few years, the Philippines has emerged as a key player in the development of data centers because of elements including COVID-19's adoption of the Internet, the rise in popularity of CDNs and gaming, the booming BPO sector, and strategically located data centers.

What are the disadvantages of cloud? ›

Disadvantages of cloud computing
  • data loss or theft.
  • data leakage.
  • account or service hijacking.
  • insecure interfaces and APIs.
  • denial of service attacks.
  • technology vulnerabilities, especially on shared environments.

What are the 3 common reasons to use the cloud? ›

Let's look at some of the most common reasons to use the cloud.
  • File storage: You can store all types of information in the cloud, including files and email. ...
  • File sharing: The cloud makes it easy to share files with several people at the same time. ...
  • Backing up data: You can also use the cloud to protect your files.

What are the risks of cloud computing? ›

8 Common Risks of Cloud Computing
  • The impact on a business return on investment (ROI) ...
  • Compatibility. ...
  • Trust. ...
  • Confidentiality. ...
  • Compliance. ...
  • Security. ...
  • Lack of control over performance. ...
  • Lack of control over quality.

How do data centers make money? ›

How do data centers make money? Data center operators make money by leasing or licensing power and space.

Who is the largest data center provider? ›

Top 11 BEST Data Center Companies | Datacenter Services In 2022
  • Comparison Of The Best Data Center Service Providers.
  • #1) Equinix.
  • #2) Digital Realty.
  • #3) China Telecom.
  • #4) NTT Communications.
  • #5) Telehouse/KDDI.
  • #6) Coresite.
  • #7) Verizon.
25 Oct 2022

What is the difference between private cloud and data center? ›

To begin with, the infrastructure of a private cloud does not require any additional physical space because it is an entirely virtual system. The data center's physical infrastructure takes up a certain amount of space within the organization's main facility.

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