Monday, 20 February 2012

Hosted or on-premise....or both?

SMBs are often faced with the dilemma whether they should go for a hosted or an on-premise solution. There is really no right or wrong answer but companies need to assess their business needs and infrastructure before taking a decision. The fundamental point is that not all solutions work best in the Cloud or on-premise and the choice often requires a trade between security and costs to optimize returns.

There are advantages and disadvantages with both platforms and these are subject to the type of software/service under consideration. The table below outlines the advantages and disadvantages of the hosted and on-premise delivery model.

Taking the plunge: pain points
What makes the decision far from easy to take is that there are conflicting arguments and pressures.
Costs are a primary concern but organizations cannot ignore issues related to security and compliance.

The plunge into the Cloud is often based on the following four pain points:
Lack of resources to build an infrastructure
  • Software licensing costs are too expensive for a start-up
  • Lack of resources, especially in IT
  • Lack of technical know-how to maximize benefits of IT systems
It is not surprising that SMBs, especially start-ups, see the Cloud and hosted services as a very attractive option. However, more experienced SMBs should be looking far beyond costs as a sole consideration.

Larger organizations, particularly those operating in industries with strict legislation and compliance
regulations should factor in:
  • Third-parties are handling confidential data
  • Redundancy – what happens if the solution provider fails
  • A subscription service could be expensive over time and as business grows
  • Customization and integration with custom systems could be an issue
  • Lack of full control over data and processes
Going back to the question ‘which is best: hosted vs on-premise?’ the answer is neither and both. The key is to find a balance between both delivery models and adapt according to the business’s needs. Simply put: choose what makes business, security and technical sense.

Some applications are great for hosting in the Cloud: CRM products, network monitoring, travel applications, systems backing up on-premise hardware/software solutions. On the other hand, applications such as accounting packages, data storage solutions for compliance purposes and most security products are best implemented on premise. When you factor in the cost savings, the Cloud often appears to be the best choice but that does not mean that a solution’s implementation is justified in terms of the technology, the organization’s set-up and/or its requirements.

The solution: A hybrid model
Today, vendors tend to do one or the other, focusing their efforts in one direction or another thus limiting the possibilities that a multiple-solution, single-vendor strategy can offer. The hybrid approach, however, sees a vendor giving customers the best of both worlds by allowing them to maximize the benefits of both a hosted delivery model and those of the on-premise model. The benefits of the hybrid model vary from one customer to another but they can be summed up as follows:
  • Run applications where they are most needed and fit best into the corporate infrastructure
  • The hybrid delivery model makes sense for all companies whatever their size or infrastructure
  • The benefits of the hybrid approach can be maximized by a 10-employee company or a 500- employee company, all that changes is the environment in which the solutions are used.