Skip to main content

Office 365 Cloud vs On-Premise

Business Cloud-based solutions have become more attractive due to; onerous security and compliance regulations, faster and cheaper bandwidth costs, widespread worldwide online availability, and, of course, the maturity of the Cloud-based offerings themselves.

Additional benefits such as; reduced licensing costs, reduced hardware maintenance costs, reduced software maintenance costs, and reduced IT administration costs, makes one wonder why everyone hasn't already migrated their systems to the Cloud with products such as Microsoft Office 365.

Although there is no doubt that Office 365 provides businesses with a cost-effective alternative to traditional on-premise IT solutions, several challenges are causing the delay of widespread adoption. These challenges include where businesses have:-

- Concerns regarding third-parties handling confidential data.

- Concerns regarding the loss of control over all business systems.

- Concerns regarding the loss of control of confidential data handling processes.

- Concerns regarding customisation and integration with existing systems.

- Concerns regarding subscription service costs rising as the business grows.

- Concerns regarding location of data for legal, financial and compliance regulations.

- Concerns regarding business continuity should a cloud data centre have a disaster.

Because of these concerns, it is vital that a holistic view of the relevant business processes is taken prior to moving to any Cloud service and due diligence of the cloud vendor taken before engaging with the vendor's offering. From the holistic perspective, businesses need to be creative to reduce their concerns rather than thinking only cloud offering or on-premise IT solutions. There is a third solution which is the hybrid. A hybrid solution to Office 365, to deal with his business concerns, was used by John Walker of Secure Bastion Limited, who commented,

"Although much of our data is stored in the Office 365 datacentre, it was essential that confidential information was kept on-premise at Secure Bastion. Businesses with sensitive data, such as intellectual property information, should adopt a similar solution. The hybrid model substantially reduces the risk of this data being mishandled by a cloud vendor employee or by an employee being careless with their password."

From the perspective of due diligence, businesses need to share with the cloud vendor their concerns to see whether appropriate measures have been put into place to allay their worries. For example, only Microsoft's European datacentres in Dublin and Amsterdam are used to store Office 365 data. This regional model ensures that businesses comply with European data privacy regulations. John Howie, Senior Director of Technical Security Services for the Online Services Security and Compliance (OSSC) team within Global Foundation Services at Microsoft Corporation, said "Between those two datacentres we can provide failover, so if one of them goes down, servers will switch to the other." In other words, the regional method has an additional benefit with regard to business continuity concerns.

Using a hybrid model incorporating Office 365, can help businesses take immediate advantage of the benefits and reduce migration, compliance and security concerns. For more information on other business concerns see Accenture's report on Cloud Computing and Sustainability.