Deciding where to store data — on-premise or in the cloud — has become a critical decision for any modern company.
Many organisations now adopt hybrid cloud strategies, taking advantage of both on-site and cloud-based storage solutions. However, determining which data belongs where requires a careful analysis of performance, accessibility, cost, and security.
📍How to decide what data goes where?
1. Where is the Data Processed?
A key factor in choosing the storage location is where data is primarily processed.
Minimising latency by placing data near applications is essential for performance. High-demand applications, especially those requiring real-time processing, often perform better with on-premise storage.
If cloud storage is accessed via the Internet, it can introduce variable performance and latency. Still, not all data requires low-latency access. Some applications, particularly those designed for the cloud, may perform well without needing data stored locally.
2. Frequency of Data Access: Hot vs Cold Storage
The frequency with which data is accessed greatly influences its optimal storage location.
"Hot data", which is regularly accessed and modified, benefits from the speed of local storage. On the other hand, "cold data", such as archived or backup information, can be stored in the cloud or in lower cost (slower) storage devices, as its infrequent access makes performance less of a concern.
Organisations that fail to understand their data’s access patterns risk storing frequently accessed data in cloud systems that are not optimised for performance, leading to higher costs and delays.
3. Costs: Weighing Upfront and Ongoing Expenses
Cloud storage is often perceived as a cost-saver, but businesses must evaluate the long-term financial implications.
While the cloud shifts costs from upfront capital investment to operational expenses, this doesn't always result in savings. Over time, well-optimised on-premise storage may prove cheaper, particularly for companies with existing infrastructure.
In addition it's always difficult to determine precisely the total cost of a cloud solution. And eventually companies find out that cloud-based solutions are not cheaper.
Costs like data egress fees, which apply when moving data out of the cloud, must also be factored into the decision-making process.
Key reasons contributing to high cloud costs include a lack of predictive cost insights, insufficient real-time cost transparency, inadequate architectural setup and planning, outdated cloud-native application architectures, limited control for product teams, and costs not being integrated into delivery processes.
However, the cloud offers unmatched flexibility, allowing companies to scale up or down quickly.
4. Security and Compliance: Safeguarding Data
Security and compliance requirements play a significant role in the storage decision.
In the past, organisations were reluctant to store sensitive data in the cloud due to concerns over security. However, cloud providers have evolved to meet most security and regulatory needs, enabling even industries with strict compliance demands to use cloud storage for non-sensitive data. Always verify the certifications and the compliance of the specific cloud provider as not all are ready for storing e.g. sensitive data.
For highly regulated industries, storing sensitive data on-premise remains the safest option, while leveraging cloud solutions for less critical workloads.
📍Finding the Right Balance
The decision of whether to store data on-premise or in the cloud depends on performance needs, cost considerations, and security requirements.
A hybrid cloud approach, where sensitive, performance-critical data remains on-premise, while less critical information is stored in the cloud, often provides the best balance of flexibility, performance, and cost efficiency.
Regardless of the storage choice, it's essential to implement a robust security model. Regularly reviewing access privileges for storage resources, files, and folders is critical to preventing unauthorised access and data breaches. This process requires specialised tools that assist IT administrators, while also providing executives like CIOs, CISOs, and CTOs with the insights needed to make informed security and compliance decisions. Continuous monitoring and periodic audits help maintain the integrity of both on-premise and cloud storage environments.
