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Clients often ask us questions about whether it’s better to have a data center for a company’s digital assets or be in the cloud. Because a dedicated data center doesn’t have to be at a client location, it is easy to get confused about these concepts.

All of our customers are in the cloud in some aspect. The popularity of cloud-based applications (Software as a Service, or SaaS), Platform as a Service (PaaS)—a development environment—and Infrastructure as a Service (IaaS) have tempted many companies into the cloud with their promises of anytime/anywhere access and a lower cost of ownership than buying and maintaining hardware and software.

However, we have clients with on-site data centers and off-site backup data centers. Company IT officials keep going around and around about whether they should keep replacing aging hardware in multiple locations.

For every company, it’s a business decision, a cost decision and a security decision. Let’s explore this concept further.

Storage has come a long way

Data centers have been around since the time when servers were the size of refrigerators and punch cards were cutting-edge input media. On-site storage was the way to go.

Later, storage media became tape drives, floppy disks and, later still, compact discs. Even before the Internet became mainstream, tech companies started selling the idea of off-site data centers that used private data pipes between a company and its data center.

The amount of data that could be stored was based on the capacity of the servers that were on site, so if data needs increased, the number of servers also had to increase. The same holds true today, with both on-site storage and with data center storage.

In our opinion, a data center makes no sense unless a company has more than 1 terabyte of data. Of course, companies can now host all of their data in the cloud. When you think about it, the cloud is nothing but an application written to run across data centers located in different geographies for redundancy and anytime access.

Since the cloud remains relatively new, questions remain about the security of cloud computing. With any system, the weakest link is the most vulnerable one, and it’s true there are more entry points to a cloud-based system. However, cloud companies take data security seriously, so look for providers that have security credentials from an accrediting organization. That can give you peace of mind. Do keep in mind that most of the data center providers out there now are based off the Cloud.

With that said, you could very well understand that the concepts of a data center and the cloud are becoming thinner. However, the cloud holds the edge here. It has the geographical distribution and a lot more to give in terms of software to its users. A cloud account can very well be used as a data center, irrespective of the size of the data. It’s very versatile. And if you’re thinking about running applications, the cloud is a no-brainer.

The latest angle to the decision is that the data center is no longer just used for storing data. This historic data is run through multiple engines. Prediction, Analysis, ML and AI are all engines that run through this old data to learn, suggest and apply rules or behaviors that impact business, its software and customers. When you add all these criteria to the equation, going for a simple data center might not be in your best interest. Look at where your business or software requirement is going; it will let you know what to choose.

In terms of cost, the cloud is hard to beat. While a company can recover data center infrastructure costs in a few years, that’s about the time when that equipment will need to be replaced. And it’s not just the cost of the new equipment that matters – recycling the old equipment also adds costs. With the cloud, you can have as little or as much storage as you need, making changes in a few clicks or swipes. Discounts are available for larger amounts of data and/or longer-term storage contracts. The capability to buy when you need and offset when you do not is huge in saving costs.

And let’s not overlook the hybrid cloud, which can be the best of both worlds for companies that combines on-site and off-site services.

Rajesh Thampi

About the author

Rajesh Thampi

Practice Director, Digital Development & Ops

Rajesh has been researching cutting edge technologies and trends as the Digital Practice Director with Pyramid Consulting since 2011. His day to day features a mix of training internal teams, advising clients, and setting the technological path for all of his Pyramid Consulting peers. His driving force in life and in work is “the need to know, the ability to do, and the vision for perfection”. Rajesh prides himself on his ability to cultivate and comprehend technology on a high level, for his own joy and the success of his Pyramid Consulting family.

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