On Premise or Hosted?

On a regular basis clients ask me when or if they should move their systems to the cloud.  There is never an easy answer to when you should move your systems to the cloud and as I tell each client, every situation is different.  These are some of the questions I ask them:

How important is uptime?

Uptime and backups are one of the most important to any organization.  A cloud solution or moving your systems to the cloud, alleviates these issues.  Most, if not all, cloud providers provide strong uptime standards and backup systems.

How are your backups managed?

With Azure you are limited to predefined server configurations as it relates to processor and memory combinations.  For most organizations those configurations are fine but for larger organizations you may need a more tailored solution.  Some systems require more ram than processing power.  Data Center providers have the flexibility to customize the solutions which ultimately save you money.

Do you have public facing information that can’t be down?

I recommend to clients to have a cloud solution using VM’s instead of the purse SAAS environment.  There can be advantages to the SAAS environment but for the larger organizations you can’t get the flexibility you need to adapt the software to there ever changing environment.  Companies should have total control over their data and how it is accessed.

What do you spend to maintain your infrastructure?

Am I ready to move because my IT spend is getting larger?  Let’s look at an example, but do remember that every situation is different.  If you are currently hosting your servers on-premises, your spending may be this over a three-year period for a small 50-person organization with 10 computer users.

Description Annual Cost (Over 3 Years)
Dell Server $3,333 $10,000
Windows Software 3 Licenses $1,000 $3,000
Local Server Support Outsourced $30,000 $90,000
Backup System and Software $2,250 $6,750
Disaster Recovery Non Existent  —
Total over 3 years  — $109,740

For the same environment for a cloud solution

Three Servers with licensing and monitoring  $22,000
Online Backup $ 1,200
Total over 3 years $69,600

As you can see, cloud hosting is a more cost effective solution.  The hosting pricing stays for the most part static, as the on-premises solution, after three years, would incur more costs with a hardware refresh and services to redeploy your applications. This is something that is often overlooked in the cost comparison.

Should I use AWS, Azure, or another provider to host?

I tend to look at the complexities of the organization.  AWS and Azure are great cloud providers for the smaller organizations or organizations with limited systems.  They provide a lot of value for these organizations as they have all of the tools to deliver a cloud solution such as VM technology, server technology, VPN, Active Directory, and more as configuration options.  What they lack, though, is the custom configurations that larger organizations need.

If you are a larger organization with complex hosting needs, I generally look at a data center provider such as TierPoint or Expedient.  These organizations provide a more tailored solution for larger organizations and therefore can save them money in the long run.


[avatar user=”tlally” size=”thumbnail” align=”left” /] TIMOTHY (TIM) LALLY, SR. | CEO/ Founder

Tim Lally, Sr. is the founder and CEO of KTL Solutions, a full technology consulting firm. As CEO, Tim is responsible for running all facets of the business including, but not limited to, mentoring new developers, teaching accounting principles and processes, and leading the development and design of custom solutions. Tim also works directly with clients promoting lasting relationships, analyzing business processes, and providing effective solutions to improve productivity. He provides high-level guidance to KTL clients in order to help them better use technology within their organization.

With a proven, executive track record and over 20 years of experience driving sales, consulting, and development within the technology industry, Tim’s specific experience has been with Microsoft Business Solutions’ software implementation and development. Tim started implementing MAC GP in 1987 and has been working in Microsoft Dynamics GP since 1994. Tim is an inactive Certified Public Accountant with a Bachelor’s Degree in Accounting from University of Maryland.

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