Data centres provide network connections and internet access while storing important information.

In situations where multiple servers are needed, for example, in large-scale data operations – specialist software assists in distributing the workload.

What is the difference between an on-premises data centre and a cloud data centre?

A cloud data centre takes all the features of a traditional on-premises data centre, like storing and sharing applications and data, and moves it to the cloud. Instead of managing their own data infrastructure, businesses ’rent’ a portion of digital infrastructure run by a third-party company.

Businesses can rely on a third-party provider to manage maintenance costs, updates, meeting Service-Level Agreements (SLAs), and even scaling resources to match demand. This significantly reduces overheads and additional on-site regulatory costs.

Advantages and disadvantages of a cloud data centre

Depending on the type of business, there are many advantages to outsourcing data centre requirements to a cloud service provider.

The advantages of cloud data centres include:

Increased scalability - On-premises data centres are limited in their capacity unless businesses invest heavily in additional infrastructure. However, cloud resources can be increased or decreased to match demand.

Greater flexibility - Unlike fixed physical infrastructure, cloud networks allow businesses to access their data and applications from anywhere, on any approved device.

Decreased costs - Installing and managing an on-prem data centre is typically more expensive than renting from a third-party cloud provider. On-site, a company pays a fixed price for all its infrastructure costs and will have to invest in greater infrastructure to scale resources to meet demand. Through the cloud, they can take advantage of an economy of scale.

Guaranteed availability - If something goes wrong in an on-premises data centre, a business must fix it immediately to avoid costly downtime. In the cloud, a basic level of service is guaranteed by the provider and protected by SLAs.

Security - Cloud data centre security is typically run in a 'shared responsibility' model, meaning the provider is responsible for the security of the cloud infrastructure. At the same time, the business is accountable for the security of its data within the cloud. This alleviates some of the responsibilities and resources required of the business. Find out more about cloud security in our dedicated guide.

Competitiveness - Cloud data centres free up time and money for businesses by reducing management and security duties and allowing them to scale cost-effectively. This gives small businesses access to the IT resources needed to keep pace with their larger competitors.

Although there are advantages to adopting cloud solutions, businesses must also consider the costs and limitations.

Some disadvantages of cloud-based off-premises data centres include:

Limited control - Since a third-party hosts data, companies have little control over servers, the services they can support, capacity and downtime, businesses should shop around to find a cloud service provider that can minimise friction and any potential impact on business operations.

Security vulnerabilities - Although third-party data centre vendors are incredibly secure, data theft breaches, account hijacking, DNS attacks and technological vulnerabilities in server integration can still put valuable data at risk. Businesses must also take responsibility for their data within the cloud solution, not relying solely on the provider.

Data transformation - Traditional on-premises networks typically enjoy faster transfer speeds as data and devices are in the same location. However, this may depend on server capabilities, and it may be more cost-effective to scale cloud solutions to meet data transfer demands.

Security and privacy concerns

Cloud data centres play a key role in the day-to-day of almost every modern business – encompassing critical applications and confidential data.

A single cloud network breach can result in costly downtime for employees and customers, as well as putting businesses at risk of noncompliance with data protection guidelines. Therefore, an organisation must have faith in its cloud service provider's capabilities while also addressing its own responsibilities to avoid the financial costs and reputational damage caused by breaches.

The ‘shared responsibility’ security model typically employed between cloud service providers and clients often ensures ample protection against malicious actors. However, there are still risks to be aware of.

Data centre security issues

Compromised credentials – Moving data from on-premises networks to the public internet increases security risks, as the business no longer has complete control over the network configuration and its data. It is recommended that businesses still operate with a balance of on-premises data centres and cloud solutions in a hybrid approach to protect highly-sensitive data.

Cyber breaches – The nature of data being stored online makes it more vulnerable to certain types of cyberattacks, including DDoS attacks, cache poisoning and other DNS threats. Find out more about cybersecurity threats in our guide.

Cloud misconfiguration – Any errors or glitches in configuring devices to the cloud can create additional weak points that malicious actors can expose.

Malicious insiders – Although rare, those with legitimate access to the data centre can use it to steal data and sabotage systems, meaning companies need a failsafe to mitigate these issues. Even well-meaning employees can make mistakes, too,  like using weak passwords, opening phishing emails and breaching BYOD protocol, which can put data at risk.

However, businesses can mitigate against the impact of cyberattacks or breaches by owning their responsibilities within a shared responsibility model, backing up data in an on-premises network and educating staff on cloud network best practices.

Find out more about how businesses can develop effective cyber threat intelligence in our guide.

Cost and scalability

Working with a third-party cloud data centre provider typically proves cost-effective compared with building and maintaining an on-site network. In fact, going through a vendor can save you between 30% and 50% compared with the costs associated with traditional on-premises data centres.

Third-party vendors also offer immediate and often automated scalability – increasing and decreasing data capacity as and when needed, so businesses can reap the rewards of peak periods while only paying for what they need. In comparison, scaling on-premises networks requires significant investment in additional servers and infrastructure.

With an on-premises data centre, businesses also cover the cost of maintaining the whole infrastructure, including security, maintenance, physical storage costs and more, with cloud data centre providers only charging for the network data used.

However, there are additional costs to consider when using cloud data centres. These include the costs associated with data back-up in an on-premises network, with a hybrid approach recommended for peace of mind, and the potentially snowballing costs of scaling the network to meet demand.

For more information on the benefits of cloud data centres, and how your business can reap the rewards, chat with our team today.