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On Premise Solutions vs. The Virtual Cloud: How to Know Which To Pitch

May 21, 2017

Many customers view a virtual private cloud (VPC) as a cost effective option that improves data management and workflow operations, simplifies access to on demand software services and off-loads their data to another site, which helps with their data backup and disaster recovery strategy. On the other hand, many companies prefer complete control of their IT infrastructure and the data running on their systems. These are some of the issues customers weigh when they compare a VPC solution to an on-premise data center.   

When value added resellers (VARs) pitch these two approaches to customers, they’ll want to evaluate a company’s overall business strategy and their ability to implement and manage an on-premise data center. For companies leaning toward upgrading their on-premise solution, they’ll have to be sure that they are prepared for the initial cost of purchasing hardware, software and networking equipment. They’ll also need an IT staff capable of implementing the technology and operating and maintaining the system.

A VPC offers a different computing model. By using a multi-tenant architecture that separates a configurable pool of shared computing resources for each customer, a VPC supports a private cloud offering in a public cloud environment. In this model, customers pay a subscription fee for the use of servers, storage, networking, bandwidth and software services that are housed in a separate facility run by the cloud provider. A VPC provides customers with the ability to easily increase their computing resources as their business grows without paying for added hardware and software to manage their business needs.

As integrators think about which model to pitch, it’s important to understand that customers have different storage needs, different business strategies and different expectations.

Because there are so many issues to consider when mulling over whether a company wants to off-load their data to the cloud or keep their information on-premise, here are some key considerations that integrators should keep in mind as they gauge which model is the best one to pitch to customers that have different business requirements.

1. What do your customers want?

Integrators will have to listen to their customer’s needs before they can make a reasonable pitch for why a customer should move to the cloud or stay with an on-premise strategy. If a customer tells you they can’t afford to hire more IT staff or spend more in hardware, then you’ll know that cost considerations are in play and a VPC model may be a better fit. If a customer says they want confidential data managed internally, or they intend to have complete control over their entire IT infrastructure, including add-ons and security, then you know they are leaning toward an on-premise solution. Listening to your customer’s concerns will help you understand which approach is best suited for their needs.   

2. Costs considerations.

The cost of establishing an on-premise data center is one of the most significant factors in determining which approach is best for a customer. There are substantial upfront costs in servers, storage and networking equipment, as well as software and personnel.  However overhead costs such as data center space, utility and bandwidth costs also need to be taken into consideration. Over time there are also costs associated with upgrading to newer versions of hardware and software. An on-premise solution also comes with a longer period for return on investment. Many companies, particularly small to medium-sized businesses, are more likely to choose a VPC solution over an on-premise data center, because they can’t afford an on-premise solution. 

3. Is your customer experiencing significant data management challenges?

There are many organizations that have seen a significant spike in their electronic data in recent years. For example, through a federal government incentive program that encourages medical facilities to adopt electronic health records, hospitals and physician offices have moved from paper-based systems to digitized medical records. Additionally, in recent year’s medical images such as X-rays, CT scans and MRIs are being stored in an electronic format. During the past five years hospitals and physician offices are managing larger quantities of electronic data, which translates to greater storage and server needs and more bandwidth. As integrators advise customers on cloud or on-premise solutions they’ll have to understand their big data growth patterns.  

4. Backup and disaster recovery planning.

Many organizations are mulling over contingency planning in the case of a disaster such as a hurricane or a tornado. Developing a data backup and disaster recovery plan may involve a customer’s preference for having their data backed up at a site in a different location.  Business continuity is a growing concern. This being the case, a VPC can offer services that involve data being backed up into the cloud and restored to on-premises hardware in the event of a disaster.  

These are a few of the many considerations that VARs will have to consider as they seek to find out which option – a VPC or an on-premise data center – is the better data management model to pitch to a customer. As VARs discuss these two approaches,  they’ll find they can help customers gain a greater understanding of the pros and cons of each model, which in turn will help customers make the best decisions that meet their specific business needs.