David Eichkorn
Author: David Eichkorn Date: 06/08/2017

The Cost Difference of Cloud Storage vs. On-Premise Servers

In deciding where and how to store data, there are a lot of variables to consider. Often times, the most important factor of every data specialist is simple: cost. With an estimated $900 million being wasted every year with cloud storage, it is important to weigh the costs of both cloud storage and on-premise servers to evaluate which is the better value. While on-premise servers allow for more control over the data and the ability to add as much security as necessary, the convenience, support, and low start-up costs of cloud storage cannot be ignored.

Initial Cost

Deciding between the Cloud and on-premise data storage has often been compared to the rent vs. buy determination. With the cost of hardware, power consumption and physical space needed to implement on-premise storage, the Cloud is far less of an initial financial investment, especially for businesses with smaller data needs.


Another factor to consider when deciding between cloud services and an on-premise system is the monthly maintenance cost. With cloud services, you are charged a set fee every month, like a subscription, that will aide in future budgeting. With on-premise servers, monthly costs are often limited to electricity, IT and management — but risk costly operational downtime and loss of data if a security breach were to occur.

With a cloud service provider, server maintenance and upgrade costs fall on the service provider—not you. And with the variety of systems available, the cost of repairing or upgrading a server can vary considerably. With on-site management, having no data manager requires calling in a technician at an additional cost for hardware installation.


A big reason the Cloud may be a cheaper data management system than an on-premise server, or vice versa, is the amount of data you need stored. While many cloud services offer free storage that range from 5GB to 15GB, organizations that need several TB or Petabytes often find cloud services to be cost prohibitive and it’s ultimately cheaper to use on-site data servers.

Increasing Storage Capability

If your organization needs to increase its data storage, the Cloud is the easiest and fastest option. In order to store more data with on-premise servers, the equipment would need to be ordered, paid for, shipped and installed before the storage could be utilized, which may be costly and time consuming. With the Cloud, acquiring space to host more data is available instantly with the click of a mouse.

Total Cost of Ownership

With so many things to consider, a total cost of ownership calculator is a great tool to help determine which data storage system is the more cost-effective option for your organization. The calculator lets you easily compare the overall cost against disk type, amount of RAM needed, storage environment and outbound bandwidth.

Ultimately, cloud systems are cheaper in start-up costs, maintenance costs and support costs; however, the exact figure depends on the amount of data needed to be stored.

To decide what data storage system is ultimately best for you, talk with a professional who can help you identify and prioritize your data management needs and work closely with you to develop a plan suited for your organization. Contact an expert at Gordon Flesch Company for a free consultation to recognize and attain your data storage goals.

Topics: Managed IT, Cloud

Beginner's Guide to Cloud Computing Inforgraphic

Comment FORM

Written by David Eichkorn

Throughout David's 20-year career in IT support and management in both SMB and large enterprise environments, he has worked directly with upper level management teams to implement technology needs for executives all over the world. David focuses on representing technology to business owners and managers in a way that allows it to be the driving factor in how an organization accomplishes its business goals.

Need More Information?

We’re ready – and eager – to help you solve your technology challenges.