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On Prem or Hosted Deployment? What's Best for Your Business?

On Prem or Hosted

"On-prem" and "hosted" are two different deployment models for software, services, or infrastructure. The choice between the two depends on various factors, including the organisation's needs, resources, security requirements, and technical expertise.

Let us explain each term:

On-Premises (On-Prem)

On-premises deployment involves setting up and managing software, applications, or hardware within your organisation's physical infrastructure. This means that the servers, storage, networking equipment, and software are all located within your own data centres or facilities. You have full control over the hardware, software configurations, and security measures. This option can provide better control over data and sensitive information but may require more upfront investment in terms of hardware, maintenance, and expertise.

Pros of On Prem
  • Full control over hardware and software;

  • Potential for better security and compliance;

  • Ability to customise configurations to meet specific needs; and

  • No reliance on external providers for infrastructure.

Cons of On Prem
  • Higher upfront costs for hardware and infrastructure;

  • Ongoing maintenance and updates are the organisation's responsibility; and

  • Limited scalability without significant investments.

Hosted (Cloud or Managed Services)

Hosted deployment, also known as cloud or managed services deployment, involves using third-party providers to host and manage your software, applications, or infrastructure. These providers offer services over the internet, and you typically pay for what you use on a subscription basis. Cloud providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform offer a wide range of services, including virtual machines, databases, storage, and more.

Pros of Hosted
  • Lower upfront costs compared to on-premises;

  • Scalability: Easily scale up or down based on demand;

  • Managed services: The provider handles maintenance, updates, and security; and

  • Accessibility: Access services from anywhere with an internet connection.

Cons of Hosted
  • Less direct control over hardware and software configurations;

  • Potential concerns about data security and compliance, depending on the provider;

  • Ongoing operational costs can accumulate over time; and

  • Reliance on the provider's infrastructure and services.

Choosing between on prem and hosted deployment depends on factors such as:

  • Budget and cost considerations;

  • IT expertise and resources;

  • Scalability requirements;

  • Security and compliance needs;

  • Accessibility and remote work considerations; and

  • Performance and reliability expectations.

Many organisations are adopting a hybrid approach, where they mix both on-premises and hosted solutions to balance control, security, scalability, and cost-effectiveness. Ultimately, the choice should align with your organisation's strategic goals and technical requirements.

So, is On Prem or Hosted better for the Smaller Business?

The decision between on-prem and hosted solutions for small businesses depends on various factors, including the business's specific needs, budget, technical expertise, and growth plans.

Here's a breakdown of considerations for the small business:


Pros of On Prem
  • Control: On-premises solutions provide direct control over hardware, software, and data. This can be advantageous if you have specific customisation requirements;

  • Security: Some small businesses with sensitive data might prefer on-premises solutions due to the perception of better security control; and

  • One-time Costs: While initial investment can be higher, on-premises solutions might have lower recurring costs once the infrastructure is in place.

Cons of On Prem
  • Upfront Costs: Setting up on-premises infrastructure can require a significant upfront investment in hardware, software licenses, and setup;

  • Maintenance: Your business is responsible for maintenance, updates, and troubleshooting, which could require technical expertise and time; and

  • Scalability: Scaling up can be more challenging and costly due to hardware limitations.

Hosted (Cloud or Managed Services)

Pros of Hosted
  • Lower Initial Costs: Hosted solutions often have lower upfront costs as you don't need to invest in hardware and infrastructure;

  • Scalability: Cloud services allow you to easily scale resources up or down based on your business's needs, avoiding the need for significant upfront investment;

  • Managed Services: With hosted solutions, the provider handles maintenance, updates, and security, reducing the burden on your business; and

  • Accessibility: Hosted solutions are accessible from anywhere with an internet connection, facilitating remote work.

Cons of Hosted
  • Ongoing Costs: While the initial costs might be lower, monthly subscription fees can accumulate over time;

  • Dependence on Provider: Your business relies on the hosting provider's infrastructure and service availability; and

  • Security Concerns: While cloud providers invest heavily in security, some businesses have concerns about data security and compliance.


  • Budget: For small businesses with limited budgets, hosted solutions might be more attractive due to lower initial costs;

  • Technical Expertise: If your business lacks IT expertise or resources, a hosted solution could be beneficial as it reduces the need for in-house technical management;

  • Scalability: If your business anticipates growth, hosted solutions offer easier scalability without significant hardware investments;

  • Data Sensitivity: If your business deals with highly sensitive data and requires strict control, an on-premises solution might be preferred;

  • Operational Focus: Hosted solutions allow your business to focus on core operations rather than IT infrastructure management; and

  • Remote Work: If remote work flexibility is important, hosted solutions provide better accessibility.

In many cases, small businesses opt for hosted solutions due to the benefits they offer, such as cost-effectiveness, scalability, and reduced maintenance. However, it's essential to assess your specific needs and consult with IT professionals, such as CloudComm 360, to make an informed decision based on your unique circumstances.

We at CloudComm360 have helped many small businesses, make the important decision of on prem or hosted. We have managed the transition to a more cost effective, efficient hosted/cloud soluton. If you would like to find out how we can help your business, why not get in touch? After all, as winner of the SME Northern Enterprise Award for Cloud Communication MSP of the Year 2023, it's proven, we know what we're talking about!


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