Storing Data In-house vs. In the Cloud — The Pros & Cons

David Eichkorn
Author: David Eichkorn Date: 04/12/2018

I know it can be risky to put your stuff in the hands of someone else. I’m still hoping to get my copy of Journey’s Greatest Hits back from my college roommate. But when it comes to valuable business data, trusting it to a third party can be a really scary proposition. That’s why, despite some obvious benefits, many companies are reluctant to put their business data in the Cloud. Maybe that’s why we get asked so many questions about Cloud storage solutions.

Keeping your data safe is a big deal. According to the U.S. National Cyber Security Alliance, 60% of small companies go out of business within six months of a data breach. As Cloud storage becomes an increasingly popular option for backup and business continuity solutions, it’s important to balance the convenience of online storage with the risks of outsourcing your mission-critical tasks. 

Cloud services are increasingly popular, but by no means a ubiquitous IT solution in the corporate world.

According to IDG’s Enterprise Cloud Computing Survey, U.S.-based companies budgeted $1.77 million for Cloud services last year. In addition, 21% say data storage and management applications are a high priority for their Cloud migration plans. 

A downside to the Cloud is that data storage is out of your control. Cloud providers can disappear or change hands, putting your data in the hands of a third party you don’t know or trust. And, unlike an in-house IT person, monitoring your data and restoring it in the event something does go wrong likely won’t be their top priority.

The upside is that Cloud providers like Amazon Web Services (AWS), Microsoft and Rackspace can invest billions of dollars each year in research and development, delivering more robust features, services and security than a single organization can provide for itself. Microsoft recently said it invests more than $10 billion a year in research and development for it’s Cloud services, and last year said it would spend $1 billion on cybersecurity research alone.

So, should you house your business data on physical in-house servers or shift to the Cloud? To help you make the best decision for your unique IT needs, let’s first outline the pros and cons of each.

Cloud Storage

No need for capital expenses or to purchase hardware.
Service and user experience is limited by the speed of the internet connection.
Grows to fit your business needs. Pay for the options you want.
Some third-party cloud services could access your data.
Mobile and remote workers can connect from anywhere, using any computer, tablet or smartphone. Companies can implement BYOD (bring your own device) policies.
If your internet service goes down (or if the Cloud provider’s does), you won’t have access to any of your information.
Data can be backed up in the Cloud, minimizing data losses in disaster situations.
Even giant Cloud services like AWS and Microsoft have suffered service outages and have been the victim of Denial-of-Service attacks.

In-house servers

Gives you physical control over your server.
Requires a capital investment in hardware and infrastructure.
Keeps critical data in-house; no third party has access to your information.
Requires a server room or closet in your office for rack space, as well as dedicated IT support.
No need to rely on an internet connection for access to data.
Requires off-site or even Cloud backup services to ensure you can recover data in the event of a fire or other disaster. Without a properly working backup system, data loss could be permanent.
Can be more cost-effective for companies that are not as concerned about uptime.
If downtime occurs, recovery of data or systems could be lengthy while waiting for replacement equipment or diagnosis and repairs. Many Cloud providers offer uptime guarantees.

In theory, Cloud service providers have resources no in-house IT staff could ever hope to match.

Today’s threat environment is more complex than ever, meaning in-house IT staff needs to deploy and maintain a firewall, intrusion prevention system, a Virtual Private Network for remote access, anti-virus/anti-malware software, plus separate appliances for email security. In addition, many corporate clients insist that partners meet data security or regulatory standards (such as the Health Insurance Portability and Accountability Act (HIPAA)) before sharing sensitive data.

Many in-house IT networks are managed from a supply closet or backroom, giving open access to anyone who may enter the office. Organizations that rely on local, on-premise solutions often must fall back on unsecured or even archaic mechanisms to move and share data, including mailing data on external drives or disks.

However, a local software installation offers benefits as well. When using third-party file sharing services, the data is typically taken outside of the company’s IT environment, and that means that the data’s privacy settings are beyond your control. Different Cloud service providers offer various options for data storage and handling. Finding a Cloud storage service that provides automatic data encryption means that anything you share or store with that provider will be safe.   

Additional risks include malicious hacks of Cloud providers or compromises of user accounts. The best way to avoid potential risks is to ensure your provider encrypts your files during storage, as well as transit, within a range of 128 to 256 bits. Securing your login credentials might require an investment in a secure password management service. Also, make sure you read the provider’s terms and conditions and scrutinize its data protection policies before using its services.

Whichever solution you choose — Cloud or local server storage — the IT experts at Gordon Flesch can help you determine the right setup to meet your specific business needs. Contact the Gordon Flesch Company for a no-cost assessment and to learn more about how our Managed IT services can help secure your local or Cloud-based IT infrastructure.

Beginner's Guide to Cloud Computing Inforgraphic

Topics: Managed IT, Cloud

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Written by David Eichkorn

Throughout David's 20-year career in IT support and management for big and small enterprises, he’s helped executives all over the world. David implements technology in a way that allows it to be the driving factor in how an organization accomplishes its business goals.

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