On-Premises vs. Cloud Storage: Choosing the Right Solution

As the debate continues around the ideal cloud storage solution, Dennis Hahn, principal analyst for data center storage at Omdia, recommends thoroughly evaluating all available options to create a customized blend of on-premises and cloud storage for optimal results.

Overview of Storage Buying Choices

In today’s rapidly evolving IT landscape, businesses face a critical decision when it comes to data storage: whether to invest in on-premises storage solutions or to leverage cloud storage services.

The choice between options is pivotal as it influences not only the efficiency and scalability of IT operations but also the overall cost structure and agility posture of the organization.

Implementing a cloud-smart IT strategy allows companies to avoid overcommitting to a single approach, enabling a more strategic and flexible use of both cloud and on-premises resources. Additionally, it enhances operational efficiency by aligning storage solutions with the specific needs and strategic goals, ultimately contributing to the organization's overall success and resilience.

Being Cloud Smart

Businesses are constantly seeking ways to optimize their IT investments, while enhancing operational efficiency and flexibility. Adopting a cloud smart strategy is the best approach to achieving this.

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A cloud smart strategy evaluates the specific needs of each workload and places it in the most appropriate environment, whether that be on-premises or in the cloud. This thoughtful and nuanced approach not only maximizes performance and cost-efficiency but also optimizes the overall share of wallet for storage.

Understanding Storage: On-Premises vs. Cloud

Despite their fundamental differences in architecture and deployment, on-premises and cloud storage share many similarities. Both approaches provide reliable, secure protection against data loss, along with supporting block, file and object data organization and access methods to suit various workload types.

Both storage solutions offer the ability to scale performance and capacity, but in different ways with some notable distinctions.

Best Usage of On-Premises Enterprise Storage

On-premises enterprise storage is usually provided as dedicated appliances, featuring specialized hardware built for high performance and reliability. By leveraging this type of storage for critical workloads, organizations achieve optimal performance, comprehensive data capabilities, and full control over critical applications.

Traditional storage solutions come pre-configured with both hardware and storage software, eliminating the need to integrate the two components. Although this streamlined setup ensures easier deployment and reliable performance, cloud storage remains more accessible and simpler to provide, especially for general-purpose needs.

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Ideal storage workloads for running in on-premises data centers (DCs) include:

Predictable and often mission-critical workloads

Workloads with predictable growth that run 24/7 will likely match well with the cost predictability and performance consistency of on-premises storage. Examples include ERP systems, CRM systems, and other enterprise applications with stable growth and performance considered mission critical.

These applications are likely to run more cost-effectively via on-premises DCs, as they do not benefit from the cloud’s pay-per-use scaling and data tiering to save money. Furthermore, if an organization has a highly skilled on-premises support team, they will have complete control over change and upgrade sequences, minimizing downtime.

Specialized storage solutions and hardware configurations

High-end enterprise storage systems are purpose-built, fully integrated hardware and software appliances that offer advanced capabilities often not found in cloud block and file storage.

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Specialized storage solutions contain storage functionality that some organizations prioritize, such as proven and dependable symmetric fail-over, data scrubbing or certain levels of storage caching.

DC planners that control deployments may prefer to deploy these storage systems in custom configurations and integrate them with other corporate and manufacturing systems.

Obtaining the latest and greatest storage systems

If an organization considers data crucial to its business operations, maintaining control over certain aspects of its storage infrastructure can offer significant benefits. This control allows for customized configurations that provide a competitive advantage for digital transformation initiatives.

Additionally, storage vendors that specialize exclusively in storage solutions often introduce important functionalities ahead of cloud storage services. For instance, some primary storage systems include in-built features that can detect, shut down, and assist in recovering data from ransomware attacks that bypass other network and DC defenses.

Established and legacy applications

Established applications that can’t be re-written, are tightly integrated with on-premises infrastructure or require specific hardware configurations are best kept on-premises. These include applications using proven and dependable fiber channel (FC) storage networking connections or using certain network-attached storage (NAS) functionality.

As NAS is relatively new in some public clouds, some application features needed for cloud file services may be absent, such as support for older security protocols that may still be deployed on-site.

Applications with strong performance needs

On-premises environments are typically all-flash, with enterprise block storage optimized to harness this flash performance. The dedicated hardware seamlessly integrated with storage software, delivers outstanding computational power and speed.

Enterprise storage is provided through these dedicated resources rather than shared ones, ensuring consistent and reliable performance. When deploying storage in DCs, planners can select the desired performance levels from a range of top-tier vendor options.

Architects have complete control over storage solutions, enabling the implementation of tailored scale-out storage, such as parallel file system solutions for high-performance computing (HPC).

As a result, on-premises storage is often better suited for workloads that demand high performance and low latency, such as financial trading applications, 3D rendering, and large relational databases.

Sensitive data and compliance

On-premises storage offers organizations the benefit of complete knowledge over their DC storage infrastructure. This is important for internal data storing security mandates ensuring sensitive information remains compliant with industry regulatory standards.

On-premises NAS work well for internal data sharing within an organization and protecting data for those not using the internet.

Enterprise storage and capital expense

While on-premises storage requires significant upfront investment, it tends to be more cost-effective in the long term for use cases that are always on and scale gradually. However, ongoing costs for storage acquisition, asset management, and support must also be considered.

Despite these expenses, many organizations may find that the total costs for on-premises storage are ultimately lower compared to lift-and-shift approaches to cloud block and file storage.

Best Usage of Cloud Data Storage

Leveraging cloud storge services providers typically purchase white box storage hardware and enhance it with their own self-developed, often open source derived, SDS software.

Since cloud storage architectures are designed for mass consumption, acquiring rare high performance or very robust mission-critical capabilities can be expensive for service users.

Over the past two years, most cloud vendors have upgraded their block storage designs to better utilize SSDs and enhance performance. However, despite these advancements, cloud designs often lag enterprise storage designs in terms of performance.

Cloud storage users do benefit from highly automated software for provisioning and acquiring storage capacity. Ideal storage workloads for running in the cloud include:

Cloud-native and highly variable applications

Cloud data storage and its operational characteristics are ideal for cloud-native and highly variable applications that experience unpredictable demand. Applications that are specifically designed to take advantage of cloud environments, known as cloud-native applications, naturally perform best when running in the cloud.

The cloud’s ability to scale resources up or down in real-time makes it perfect for workloads such as e-commerce platforms during peak shopping seasons or applications with fluctuating demands.

Development and testing environments benefit from the cloud’s flexibility, allowing quick spin-up and tear-down of environments as needed and enabling rapid iteration and testing without significant capital investment in hardware.

Analytics and data pipelines

Cloud environments enabled with generative AI, vision AI models, and large-scale data processing are suitable for workloads requiring a large amount of processing power and storage. AWS EMR, Google BigQuery, and Azure HDInsight are just a few services that provide robust tools for effectively processing large volumes of data. For optimal performance, it is crucial to co-locate the storage near these cloud tools if you plan to use those.

Remote collaboration across the globe

Cloud object storage environments are the best option for workloads that need remote access and collaboration, such as communication platforms, project management tools, and document management systems. Cloud storage increases teamwork and productivity levels by providing easy access and collaboration from any location in the world.

Unstructured data and internet data applications

Cloud's object storage capabilities make it an excellent choice for web, CDN, and IoT applications that require internet access. These applications benefit from the cloud's scalability, global reach, and ability to handle large volumes of unstructured data.

Remote low-cost data retention

Using S3 compatible storage services enables businesses to easily store content, backup and restore, and archive data over the internet. These storage services provide highly durable storage with virtually unlimited capacity. Object storage services primarily use inexpensive hard disk drives and some tape capacity to keep costs low. Because of its cost-effectiveness and geographical redundancy, cloud computing and storage is ideal for disaster recovery and backup solutions. Enterprises can effortlessly duplicate data from on-premises locations, guaranteeing a resilient off-site backup plan without incurring the exorbitant expenses linked to upkeep of secondary DC sites of infrastructure.

Cloud storage services and operational expense

Cloud services charge fees based on actual storage usage; this removes the need for large capital expenditures.  Storage costs are based on predictable monthly costs, which provide greater financial flexibility and make it easier to manage operational expenses.  However, these costs have the potential to spiral out of control. Additional staff may be needed to monitor cloud expenditures. Two advantages of cloud data storage over on-premises solutions to note are the ability to scale down or temporarily scale up, and the availability of multiple storage tiers and types to better match performance needs with costs. 

The Best Advice for Being Cloud Smart

Enterprise storage provides an abundance of benefits if your workload data is crucial to maintaining a competitive advantage, or if you have mission-critical workloads that need robust solutions. Buying storage outright is likely to result in the lowest overall cost particularly for predictable storage usage when existing in-house experts can manage the storage.

Cloud data storage is preferred for more tactical, general-purpose, or temporary needs. It is also especially well-suited for cloud-native data applications, and those wanting to leverage cloud-resident analytics tools. Financially, cloud storage helps limit upfront costs, and with smart usage, you can lower your total cost of ownership expenses.

Making the Right Storage Choice

Choosing the right cloud and on-premises storage for your organization is not a one-size-fits-all proposition. Each workload has unique requirements that influence the optimal deployment environment.

Cloud storage offers unmatched scalability, flexibility, and cost-efficiency. On the other hand, on-premises storage provides control, performance, and best-in-class functionality. It is important businesses evaluate the characteristics of each workload to make smart cloud decisions that align with their strategic goals and operational requirements.

This article first appeared in the Omdia blog.