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Cloud storage vs local storage: What's best for your business?

Woman stood working on laptop outside server room
(Image credit: Unsplash)

In the last decade, cloud storage has become incredibly popular in business (opens in new tab) circles. Typically backed by a suite of powerful features, including cloud-based apps, disaster recovery, and file syncing, the best cloud storage (opens in new tab) services make business more efficient. 

But there are businesses that swear by local storage, pointing to speed and security as their major concerns with cloud storage. In this post, we’ll pit cloud storage vs local storage in an attempt to settle this debate. We’ll compare them based on their features, performance, support, and pricing to help you decide which option is best for your business.

Cloud storage vs local storage: Features

For starters, let’s be clear on the key difference between these two types of storage options. 

For cloud storage, your business’s data is managed and stored by a hosting provider using remote servers, often across several data centers. Local storage, on the other hand, involves storing your data on physical drives such as hard drives, USB flash drives, and NAS drives on your own premises.

Most cloud storage providers offer a nice selection of security and productivity features to help you run your business with ease. Although you won’t get pre-built features when using local storage, you’ll have more control over your data. Below are some key features you should keep your eye on when deciding which kind of storage to go for. 

Collaborative working

group of people sat around table working on laptops

Cloud storage helps teams work together in a more productive way (Image credit: Pexels)

For businesses, the ability to collaborate on files is crucial, particularly in this age of remote working. Thankfully, many cloud storage providers offer a wide range of tools to help you work together regardless of where you are—a feature you won’t get when using local storage. 

Unlike bare-bones local storage, your team can access and work on the same file regardless of where team members are located, without emailing the file back and forth, using a shared computer, or passing off USB sticks. Because of cloud storage services such as syncing and file versioning, changes multiple team members make to files won't be lost. 

In addition, the best cloud storage providers offer a host of apps and third-party integrations to add more functionality and help you work efficiently. 

Using local storage gives you full control over your files. You can decide where your files are stored and who has access to them. Also, local storage devices, like hard drives, are usually not connected to the internet unless you insert them into a computer. As a result, the chances of malicious cyberattacks and data breaches are reduced. 

Fortunately, cloud storage providers equal the security benefits of using local storage. For one, a top company, such as Google Drive (opens in new tab) or Dropbox (opens in new tab), will have extensive resources and experts handling your cloud storage–something a small business would likely not be able to afford.  

Cloud storage vs local storage: Security

data panel in server

Cloud storage providers take care of your data security, while that's your responsibility if you opt for local storage (Image credit: Photo by Brett Sayles from Pexels)

Cloud storage services have a suite of security features like encryption keys, password protection, and 2FA readily available. If you opt for local storage, you'll have to be ready to set up these security features yourself. 

While it's easy to place passwords on your hard drives, you'll need technical knowhow to set up encryption keys, and 2FA. Besides, not all drives are designed with such security features in mind.

Losing your data could spell doom for your business, and using local storage comes with several dangers. For instance, your hardware can fail, malfunction, or be stolen. In addition, unexpected events like fires and floods can destroy your local storage infrastructure. 

Cloud storage services, however, use disaster recovery and backup strategies to ensure that your information is never lost. Generally, cloud storage services prevent disaster loss by storing backup copies of your files across multiple servers. 

Furthermore, even if you accidentally delete a file, it will still be on the server of your cloud provider. Some companies, such as IDrive (opens in new tab), even offer to send you a hard drive of your lost files at a fee. It's worth looking to the best secure cloud storage (opens in new tab) and best encrypted cloud storage (opens in new tab) providers to ensure you've got the most secure service.

Cloud storage vs local storage: Performance

woman stood outside server room, working on laptop

Local storage has higher performance than cloud storage (Image credit: Pexels)

In terms of performance, local storage slightly edges cloud storage. Cloud servers are not foolproof: they can experience downtime and halt the progress of your work. Also, cloud storage service providers generally host your data on a shared server. This means that you are sharing server resources with other users, and as a result, your upload and download speeds can be slow. 

On the contrary, local storage doesn't have any such issues. Transferring and downloading files is much faster than using a cloud system. Another aspect of performance worth noting is internet connectivity. Cloud storage depends entirely on internet connectivity, leaving you at the mercy of your ISP. 

If your internet connection is slow or unstable, you'll have difficulties accessing or collaborating on files. Local storage, however, is not limited by your internet connection or bandwidth, and you can access your files anytime with ease.

Cloud storage vs local storage: Support

man sat at laptop at desk with headset on

Cloud storage providers offer several support platforms for customers (Image credit: Pexels)

Unless you have a crack team of in-house experts managing your local storage architecture, you won’t get any support when using local storage. You’ll have to troubleshoot and find solutions to problems all by yourself. On the other hand, cloud storage providers make customer support a priority, and they have the personnel and resources to boot. 

From phone and email to live chat support, cloud services endeavor to be available 24/7 to respond to any concerns. In addition, you’ll find that their knowledge bases are full of articles, guides, and tutorials on how to set up, run, and maintain your storage. 

The more popular cloud storage providers have active and resourceful community forums where you can share, learn, and interact with other cloud users. Generally, you’ll get priority support with paid plans. 

Some providers like Dropbox (opens in new tab) offer advanced training and specialized support for cloud administrators. That way, you can have people who are well-versed in cloud software managing and running your system.

Cloud storage vs local storage: Pricing and plans

Google Drive's pricing plans

Cloud storage services like Google Drive offer various plans and pricing (Image credit: Google One)

At face value, you might think that cloud storage is more expensive than local storage. However, that is not the case. Cloud storage providers generally offer a subscription-based pricing model. You’ll pay a monthly or annual fee to get a specific amount of storage and features. 

Some of them even offer lifetime subscriptions, ensuring that you get a permanent cloud service for a one-time fee. What's more, most cloud storage providers offer a free plan. For instance, Google Drive offers up to 15GB of storage for free as long as you have a Gmail account.

For local storage, the prices are quite straightforward. You only pay for the amount of storage space you purchase. But when you add the costs of setting up and maintaining your storage infrastructure, particularly servers, data centers, and hard drives, your storage expenses can quickly shoot up to thousands of dollars. 

For businesses looking to set up large-scale local storage such as on-premise servers, their expenses are sure to skyrocket. Such large-scale storage infrastructure often needs to be maintained consistently and upgraded every few years. Also, be ready to pay for other costs, such as cooling and electricity. 

If you're struggling with a lower cloud storage budget, reducing cloud storage costs (opens in new tab) can help you cut your spend and maintain the integrity of your storage.

Cloud storage vs local storage: Verdict

For businesses, especially small- and medium-sized businesses, using cloud storage is a no-brainer. Besides safely storing your files, cloud storage services give you access to a wide array of productivity features to help you grow your business. 

Thankfully, because of subscription-based plans, you don’t have to spend a fortune on a cloud storage service. You can opt for premium plans with more features and functionality as your business scales. However, if you are a large business with an extensive storage infrastructure and an in-house technical team to handle any issues, you may still want to opt for local storage. 

If you want a bit of both cloud and local storage, you can opt for hybrid options like Nextcloud (opens in new tab). With Nextcloud, you can connect your storage infrastructure with a LAN to create a private cloud of sorts. In addition, you get access to Nextcloud's array of productivity apps to help you grow your business.

Further reading on cloud computing

If you're interested in cloud software outside of cloud storage, take a look into the best cloud computing services (opens in new tab), the best cloud management software (opens in new tab), and the best cloud HCM software (opens in new tab). Take a look at our other guides to cloud storage platforms, covering the best cloud storage for photos (opens in new tab); the best apps to share files (opens in new tab); the best free cloud storage (opens in new tab); the best cloud backup services (opens in new tab); and the best photo storage apps (opens in new tab).

Wisdom Elikem Sablah is a B2B, SaaS consultant and freelance writer. He combines a background in mathematics, data science, and digital marketing with a knack for storytelling. He writes for top publications, including TechRadar, Tom's Guide, and CreativeBloq.