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While there are many variations in the types of cloud and on-premise deployments this article will serve as a basic guide for consideration under each.

Many businesses today are caught up in the hype surrounding the cloud and are evaluating the proposition of moving all business functions to this platform. At face value, this may seem quite attractive with promises of lower cost of ownership, simplified internal IT infrastructure and more ubiquitous access to applications, but is it what it seems? Many experts, such as Richard Brunton from Burwell IT in his article “Cloud, On Premise or Hybrid” caution a one size fits all approach. Each business application should be evaluated against the pros and cons and then decide on the best platform, on-premise or in the cloud. Both have their merits and should be considered together.

In Andrew Froehlich’s article, "Cloud Vs. On-Premises" on Information Week, he discusses the considerations in choosing the best strategy. We have summarised these below with some additional context and examples for strata:

1. Availability – When you are relying on cloud based applications, availability is the most important factor for a business. In a perfect world, we would have 24x7, 365-day internet connection and be able to access all of our data applications when required. Unfortunately, the internet in Australia has not been totally reliable with issues in connectivity, exchange fires, and floods resulting in lengthy outages and more recently with the mounting NBN issues. Any business considering which applications to move to the cloud should decide which are critical to the business and what is the fallback plan if internet access is lost.
2. Speed – Depending on where your cloud based services reside, speed or response will vary. If you are considering business applications with high data entry requirements or customer facing requirements to access information (such as when you are on the phone), you should evaluate the comparisons in the speed of on-premise applications versus those that are in the cloud. Typically on-premise applications will be faster and more consistent.
3. Integration – What other applications require integration to run your business effectively? Typical examples of these would be document management, Outlook, Word, Excel as well as cost tracking systems, phone systems and scanners/copiers. Such applications traditionally have been geared to on-premise integration, and while there may be some cloud based options, they are still limited.
4. Accessibility – Who requires access to your application is an important consideration. Internal staff and contractors are ideally suited to on-premise applications where clients are better suited to cloud based applications, such as with a customer self-service portal.
5. Data Privacy and Regulation – It is important to research potential government regulation with regards to the data that you store for your business. If you maintain large client databases, this will be of particular consideration for you. In March 2014 new laws were included in the Privacy Act that required businesses to disclose to their clients (or owners in the case of Strata) whether their data is likely to be disclosed to recipients overseas (as may be the case with many cloud based services.) You are also required to take reasonable steps to ensure that the overseas based service does not breach Australian Privacy Principles.
6. Data Security – Data has become a target for criminal syndicates around the world and they are becoming very adept at discovering security holes to steal it. Cloud computing companies have become ‘banks’ that hold vast volumes of personal data that are a target for cyber criminals. Data can fetch significant money on the dark web when sold en-masse to other criminal enterprises who use the data to hack individuals or steal identities. As an example, LinkedIn, Adobe, and Dropbox have suffered data breaches in the past few years totalling almost four hundred million accounts. As such, your data security should be a real consideration when looking at where your business applications reside. You need to evaluate your own onsite IT provider’s capabilities versus that of any cloud based service or provider. Furthermore, you should compare how open your on-premise solution is compared to that of a cloud provider. For example, an onsite solution may only be accessible via staff onsite or staff connected via a secure VPN versus a web based solution that is only secured with a password in a browser.
7. Visibility - Do you really know where your data is? In reality, once sensitive data is moved or generated in the cloud, it becomes challenging to see exactly where the data resides.
8. Data Accessibility – How important is direct access to your data? If businesses use cloud based services, they may not have direct access to their data. While most services will include some level of export capability, they generally cannot provide full database access. This could mean that pieces of important data cannot be reported on or retrieved from the cloud. Also if a company wishes to change service providers, they may have significant challenges migrating without direct access to the database. This would also be a concern if the current cloud service provider sells to a third party or goes out of business. What happens to your data?
9. Trust – The final but most critical consideration is trust. When considering using cloud based services, what is your level of trust for the proposed business? Do they have a strong reputation for managing their data and IT infrastructure? Do they have external audits of their environment? What standards do they adhere to?

While the choice between cloud, on-premise or hybrid may seem daunting, by considering the above factors in the decision-making process, you will be best placed to make the right choice for your business.

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