Businesses of all sizes need IT infrastructure for various use cases. Typically, they need it to run the different pieces of software they use, but also for file storage, to enhance collaboration, or to run artificial intelligence and machine learning models.
In the past, many businesses created in-house servers and hosting solutions that perfectly aligned with their needs. These days, they no longer have to do so because numerous cloud hosting solutions can provide the same functionalities but with added benefits. There are merits and downsides to using both, and we will be comparing them to see which would be a better fit for your business.
Understanding in-house vs. Cloud Hosting
In-house or on-premises hosting is a solution that entails creating physical servers in your premises or a separate location but still having access to them over a network.
Cloud hosting, on the other hand, is a solution for hosting websites and applications on a network of servers provided by a separate entity instead of a single physical server. The simplest way of thinking about cloud hosting is renting storage/server space and computing power from a provider instead of creating your own server room.
Comparing Costs
One of the biggest differences between cloud and on-premises hosting is cost. If you decide to create a server room, you must set aside some space for it. Physical space is often limited and pricey in commercial buildings, so this is a cost you have to consider carefully.
Next, you have to purchase the hardware and find the right software to run on it. The hardware can cost anywhere from a few thousand pounds to tens or even hundreds of thousands of pounds depending on what you need.
Then, you have to hire someone to configure the server for your specific use cases and have an IT professional standing by to deal with any issues during operations. These costs can add up, and the initial overlay can be overwhelming for small businesses with limited budgets.
Instead of doing all this, you can opt for a cloud solution. Working with a reputable provider like Gcore means you can get everything set up without worrying about the associated infrastructure costs. While you still have to pay for whichever solution you choose, you get a dedicated team working on the server, and you do not have to worry about maintenance, updates, patches, and server security because that will all be taken care of for you.
Scaling
As your business grows, you will likely hire additional employees to handle operations. These employees will likely want to connect to your server to access different software, store files, or collaborate on different projects. Any extra employee who connects to the server will mean additional strain and the requirement for additional server resources.
You can always upgrade your in-house server, but that has limits. At a certain point, your server needs will grow to a point where investing more in it will not make financial sense.
Cloud services have scaling built in. If you need more resources, you can ask the service provider to provide more. That could be additional CPU power, storage space, or RAM. The best thing about this is that you can scale up and down as your use dictates.
For example, you might hire seasonal workers during the holidays to handle inventory, customer support, and large website orders. Once the holidays pass and you no longer need them, you will also not need the additional resources.
If you had invested in physical infrastructure, you would have it all sitting ideal, which can be a huge financial waste. Remember that the idle servers will continue consuming power and taking space without producing anything of value to the business. You can avoid this wastage by switching to a cloud service provider.
Leveraging New Hardware
As technology advances, so does computing hardware. Companies like Intel and AMD are always releasing new CPUs and GPUs with additional power for different workflows. If you had an on-premises server, you would have to purchase and install the hardware yourself. You can do this to update the server or to get additional resources for new workflows, such as machine learning model training or video editing.
A cloud service provider can give you access to servers with the latest hardware or even the specific hardware you need for your workflows. This is often possible when you pay for a bare metal server, meaning you get a single server all to yourself. You can ask them to upgrade the CPU, which they will often do without asking, or to switch you to a server with the latest GPUs.
You do not have to incur the cost of this new hardware although your costs will increase a bit once they provide these updates. You will also not have to deal with downtime as they do this, and you will end up with the latest hardware that fits your needs perfectly without going into too much trouble.
Control
Cloud service providers try to provide as much variety in their services and hardware as they can. However, they cannot provide very specific infrastructure if you need it. This means you have less control of the underlying infrastructure and might not get exactly what you need. However, the service provider will try to get as close as possible.
On-premises hosting, on the other hand, gives you complete control over the underlying infrastructure, hardware, and software. If you like hardware and software solutions from specific companies or vendors, you will be free to install them on your server.
You have complete freedom to tailor your server however you want because you own and control it. You can also start with a bare metal server and add hardware and software as you need it. Even if this will not require a huge initial outlay, it still runs into some of the issues discussed above.
If your small business needs specific IT infrastructure, you can either build an on-premises server or work with a cloud service provider. Both options have pros and cons, and the best choice will depend on your needs. However, cloud services are the better option for businesses that need to keep their costs low, do not want to handle maintenance themselves, and need a solution that scales easily as their needs grow.