Navigating cloud spend: Should you choose an on-prem or cloud solution?

The debate between the merits of cloud computing and on-prem solutions has permeated business conversations for some time. The cloud has boasted solutions to the problems that on-prem infrastructure creates, especially in a hybrid world where accessibility and scalability have become paramount to how we work. For small-to-medium businesses, moving completely to the cloud is a critical cost-optimisation exercise; distributed workforces have benefitted from access to company resources no matter where they work.?

As businesses around Australia and the world fall under increasing pressure to reduce costs, many are steering their companies back to on-prem solutions due to rising cloud costs.?

We normally see these discussions about cloud costs arise when organisations migrate their on-prem networks, services or environments to the cloud. High cloud costs often arise when the migration is not completed adequately, and substantial ongoing expenses arise. Perceived high cloud costs then become a deterrent for organisations that want the benefits of cloud-based SaaS services. This resistance is further exacerbated by the shift from CAPEX to OPEX cost models, which alters traditional budgeting practices.?

However, is on-prem the right move for every business, or is a more strategic approach needed to reduce cloud spend?

Understanding cloud costs

The misconception that the cloud is a more expensive option than on-prem by default fails to account for the whole picture. If your cloud bill is increasing, there might be some variables that you need to revisit.

For example, workload optimisation is critical in balancing cloud costs with benefits. Properly managing workloads in the cloud, including knowing when to scale up or down and when to turn workloads off entirely, can lead to considerable cost savings. Cloud providers charge you for what you use, so if you have high cloud spend, it could be because you have not switched off workloads you no longer need.?

We recommend factoring in the overhead costs if you are considering an on-prem solution. The on-prem approach generates significant costs over time; hardware maintenance and system upgrades can waste time and resources. In addition, the associated upfront costs can be substantial, with purchases necessary for servers, software licenses, and the infrastructure to house and cool the equipment. The ongoing costs of employing staff for system monitoring and management are also worth noting.

What are the benefits of choosing a cloud solution?

Aside from costs, the cloud brings with it myriad benefits, including:

• Increased agility and scalability: Cloud services enable your business to scale resources up or down as needed. You can also deploy new applications much faster than would be available with on-prem solutions.?
• Business resilience: Cloud services are designed with high-level redundancy and fail-safe mechanisms, ensuring your business applications remain operational even during hardware failures or natural disasters. Regular, automated data backups in the cloud offer an extra layer of protection, minimising downtime and potential data loss.
• Productivity gains: Your team can access files and applications from any location on any device with an internet connection, enabling them to work and collaborate with minimal disruptions.

Delivering enterprise applications on-prem vs using SaaS

On-prem deployment, where the software is installed and runs on computers within the organisation, involves significant upfront costs. These include hardware procurement, software licensing, costs associated with installation, maintenance, security monitoring, and contract management. Additionally, resources for change and service management must be allocated, adding to the total expense.

On the other hand, Software as a Service (SaaS), a cloud-based delivery model, offers a different cost structure. Typically, SaaS providers charge a subscription fee based on the features you want and your number of users. SaaS applications run in the cloud, and while this eliminates the need for hardware investments and reduces software licensing complexities, you will need to keep an eye on your usage and ensure you do not pay for more than you use. However, the SaaS model provides flexibility and scalability that on-prem solutions often lack.

In choosing between on-prem and SaaS for delivering enterprise applications, the decision isn't solely about upfront costs versus subscription fees. It's also about weighing the value of flexibility, scalability, and ease of use offered by SaaS against the control and customisation potential that on-prem solutions provide. Your organisation should consider its specific needs, resources, and strategic goals in deciding the best approach to delivering enterprise applications.

Why consider a hybrid cloud solution?

A hybrid cloud approach presents a strategic blend of on-prem and SaaS solutions, enabling you to merge the distinct advantages of both environments. This approach allows your organisation to enjoy the innovation and scalability of cloud-based apps while maintaining the control and customisation afforded by on-prem systems. It creates an environment where resources can be managed and allocated effectively according to the business' specific needs.

There are several benefits associated with a hybrid cloud model. Cost-effectiveness is a key advantage, as your organisation can optimise spending by leveraging the cloud's scalability and flexibility for some workloads while keeping others on-prem. From a security perspective, a hybrid cloud model allows your business to store sensitive data on-prem while using the cloud for less sensitive workloads, so you do not lose control over data security.

Moreover, the hybrid cloud model is ideal for delivering SaaS cloud-based applications to on-prem users. So everyone within the organisation can access the innovations these applications offer.

Conclusion

Before deciding between on-prem, cloud-only or a hybrid strategy, it is important to understand your cloud spend and where you have room to optimise it. As with any operational expense, cloud spending necessitates regular monitoring to meet changing needs, technologies, and economic circumstances. The right solution—completely on-prem, entirely cloud-based, or a combination—depends on your organisation's needs, resources, and capabilities.

A hybrid strategy offers the best of both worlds, combining the security and control of on-prem solutions with the scalability and innovation capabilities of the cloud. A well-planned hybrid cloud strategy can provide cost efficiencies, flexibility, and business continuity benefits.

Why choose SecD3v as your on-prem and cloud solutions?

SecD3v provides on-prem and cloud-based customers with cost-effective, efficient, secure, and managed cloud-based DevSecOps services, among other applications.?

Built on GitLab's comprehensive platform, SecD3v is primed to support a wide array of software and machine learning workloads. With SecD3v, you can quickly deploy and consume a fully integrated DevSecOps service, which takes much less time and money than traditional approaches.

Certified with ISO27001, SecD3v is IRAP assessed up to PROTECTED, so it meets the demands of high compliance sectors such as government, finance, healthcare, critical infrastructure and academia.

You can visit our SecD3v page to learn more.