Cloud vs. Data Center: What to Consider

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When it comes to storing and accessing massive amounts of data by your company or organization, cloud data services are a cost-effective alternative to setting up and running a data center.

Essentially, a cloud data service is a remote version of a data center – located somewhere away from your company’s physical premises – that lets you access your data through the internet. The cloud provider performs ongoing maintenance and updates,?often owning multiple data centers in several geographic locations to safeguard your data during outages and other failures.

A data center traditionally refers to server hardware on your premises to store and access data through your local network. It is typically maintained by an in-house IT?department on your company’s payroll. [Are you interested in cloud storage solutions for your small business? Check out our best picks.]

If you’re deciding?between using a cloud service and building your own data center, here are three factors to help you make the right choice for your company.

1. Customizable vs. scalable

A data center is ideal for companies that need a dedicated system that gives them full control over not only their data but the hardware itself. Because only the company is using this hardware infrastructure, a data center is more suited for an organization that has to run many types of applications and complex workloads.

A data center, however, has limited capacity. You’re responsible for purchasing and installing more equipment and the latest technology if your company needs to expand the storage and workload of the data center.

A cloud data system has potentially unlimited capacity, based on your vendor’s offerings and service plans.

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The disadvantage is that you do not have as much control over the remotely located hardware, since the cloud vendor owns and manages the data center system. Furthermore, unless you pay to have a private cloud within the vendor’s network, your company will be sharing hardware resources with other cloud users.

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2. Security

With a cloud vendor, your company will be entrusting its data to a third party. It’s?up to the cloud provider?to ensure it has?the most up-to-date security certifications. If your cloud resides on several data centers in different locations, each location will need the proper security measures.

Your cloud data can be accessed by anyone with the proper credentials from anywhere?with?an internet connection. This is convenient, but it also opens a wide array of access points, all of which need to be protected to ensure that data transmitted through them is secure.

A data center is physically connected to your company’s local network. This makes it easier to ensure that only people?with company-approved credentials and devices can access stored apps and information. You are responsible for your own security, though. [Want more information on Check out this guide.]

3. Costs

Obviously, if your company builds a data center from the ground up, this will take a lot of time, and your company will be responsible for the system’s maintenance and administration. Operating?a large data center can cost a company $10 million to $25 million per year.


A cloud service is by far more cost-effective, especially for small companies. It does not require anywhere as much time or money to set up and run. The cloud service is available for your company’s use almost immediately upon registration. As your company’s data needs change over time, the cloud vendor should be able to scale your service up or down?quickly. Most companies have?a range of subscription plans to account for this.

Additional reporting by Sara Angeles.

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