Nearly every modern device has software that makes it function optimally for its designed purpose. Therefore, it is no surprise that computers and software are at the core of any Digital Transformation.
The foundation of digital transformations are computers, software and connectivity (networking).
That means an organisation that decides to digitally transform must reconsider their computers, software and networking (the connections between computers).
In the current technological era, there are three types of computing solutions: On-premise, hybrid, and cloud.
On-premise Solutions
An on-premise solution is when the software application runs on local equipment and local connections. The software, better known as the application are deployed and/or hosted on servers located on the organisation's premises.
The essence is that on-premise solutions are located on technical infrastructure that resides at a the business's location or premises.
The essence is that on-premise solutions are located on technical equipment that resides at a specific location or premises.
The size or complexity of the technical environment doesn't matter. The equipment can be hosted on a servicer room located in the building of the premise, or in another location of the organisation. The principle entails that the company owns and manages their own technology stack.
Hence the term, On-premise solution.
Cloud Solutions
Cloud solutions are software applications that are predominantly delivered over the Internet, usually by a third-party provider on a subscription basis.
Comparing it with on-premise software solutions, the cloud software resides at one or multiple locations at a vendor's premises, and is hosted on the vendor's technical infrastructure, and is accessible to subscribers via a secure internet connection. Usually, the subscriber requires an internet browser application or platform-specific client software application (apps on mobile devices) to access and use the software.
Hybrid Solutions
Hybrid solutions combine aspects of both on-premises and cloud solutions.
These solutions may offer the benefits of both or accommodate particular business needs that require a combination of the two. For example, a hybrid solution could use an on-premises server for sensitive data storage and a cloud platform for application hosting.
This type of solution allows organisations to take advantage of the benefits of both types of solutions while keeping complete control over certain computing aspects.
Important considerations
When a business considers and selects solutions, they need to carefully consider the total cost of ownership which includes the capital and all operational expenditures.
Total Cost of Ownership (TCO) of a solution
TCO for On-premise Solution
Building and maintaining an on-premise solution is expensive.
It requires buying and maintaining all hardware, software, networking, and, very importantly, employing and/or contracting 'n wide variety of well-skilled IT staff to manage and operate the system and all infrastructure.
The continuous evolution of technology also needs to be considered, which means that the initial capital investment will only be the proverbial tip of the cost iceberg.
Also, remember that these costs will be the single entity's expense and rarely receive contributions from outside the company. "Exclusive use" also means exclusive costs.
The scale of economies is the primary reason why cloud solutions are much more affordable than on-premise or hybrid solutions.
Hybrid Solution TCO
Hybrid solutions combine aspects of both on-premises and cloud solutions. These solutions may offer the benefits of both or accommodate particular business needs that require a combination of the two. It depends on the rationale and why a business chooses a hybrid solution.
Hybrid solutions are, in general, more expensive than complete cloud solutions because some technical components will not benefit from the scale of economies.
The on-premise components cause the cost of ownership and operation of the total solution to escalate significantly.
There are many other disadvantages of an on-premise solution compared to a cloud solution, including:
Time-consuming deployment:
With an on-premise solution, you'll have to wait weeks, months or even years until the system is up and running. In contrast, you can get going in hours or days with cloud solutions.
Inflexible scalability:
On-premises systems are not easily scalable, which may become problematic in an increasingly competitive market. If your business is experiencing rapid growth, having a product or service that cannot scale rapidly can result in many issues. This is especially true if your product only allows for one type of transaction or product or function. The constraints can be due to limitations in other technical areas, while cloud solutions are designed to scale from the onset.
Complex maintenance:
On-premises solutions require time-consuming maintenance and have an increased chance of failure because of the complexity involved in maintaining them.
Security risks:
A new feature or product can easily introduce security risks as it adds more complexity to the system, making it easier for hackers to exploit vulnerabilities within a network or system. This is especially true if you don't have enough staff members or people with the expertise to maintain and protect your system from attacks that could disrupt other systems on your network.
We recommend and prefer to provide pure cloud solutions, because it has so many advantages over on-premises and hybrid solutions.
