Industrial Data Storage: On-Premise or In-Cloud?

Ionut Manolache, Jean-Christophe Petkovich & Matthew Van Boxtel

Ionut Manolache, Jean-Christophe Petkovich & Matthew Van Boxtel

Senior Software Engineer | CTO | DevOps Engineer

Manufacturers today don’t just make things; they also make data about making things. By our estimate, the auto industry alone generated roughly 1000 petabytes in 2019, and all that data needs to be stored somewhere. The traditional contrast is between storing data on-premise or in the cloud, but we think a better one is between using managed or unmanaged services. 

To understand why, let’s take a closer look at both distinctions. 

On-Premise & Cloud Computing Defined

An on-premise solution requires the purchase of software to be installed and regularly attended in-house. On the other hand, using an in-cloud solution means that everything is hosted through a third-party. This way, you’re able to buy additional storage and gigabytes on a per-need basis.  

Considerations for On-Premise vs In-Cloud

Cost 

The price tag might be the largest determiner of whether a company decides to deploy an on-prem or in cloud solution. However, it’s not just a question of which is more expensive for an on-premise solution – there’s a high initial cost of buying the hardware and hiring or training personnel for maintenance and upkeep. 

Storing data in the cloud means only paying for the resources as they are needed, which avoids up-front and maintenance costs.Of course, cloud services also come with recurring fees, though these are generally agreed (especially among cloud service providers) to be less than the capital expenditure costs of an on-premise solution.

Security 

Next to cost, security is easily the biggest factor deciding between on-prem or in-cloud. The benefits of on-premise deployment are obvious: the data information is completely in your hands and isn’t shared with a third party–depending on the size of your organization, it might never leave the inside of your plant.

On the other hand, if your data is stored in the cloud, you have to put your trust in a third-party to keep your data safe. To be sure, cloud storage providers depend on keeping their clients’ data secure for the longevity of their business, but that may not be enough to convince old-school manufacturers who feel most at ease handling data security themselves.

Scale

For an on-premises solution, it may limit your company’s ability to scale up in the case where more storage is required. For a high growth organization, a cloud solution would better deliver to changing needs as it’s extremely easy to manage the size of the storage solution that is being operated with. 

The ease to scale up on cloud storage is due to the fact that it’s as simple as purchasing additional gigabytes through the provider. With on premises, it means purchasing additional hardware which can be a hassle. 

Moreover, in cases where the focus is root cause analysis or anomaly detection,, on cloud may be the better option, due to the fact that it’s less expensive to scale. If you’re trying to move fast and expand rapidly, but don’t have resources such as employees or dock engineers to do so, a cloud solution sounds like the best option. 

Latency & Use Case

While it may not be a company’s first consideration when deciding between on-prem or in-cloud, latency can be a factor, especially if your company is starting to leverage production data for advanced analytics.

In cases where you need real-time predictions, an on-premise solution is ideal because it minimizes  latencies. These predictions involve sifting through large amounts of data, which means it may not be feasible to spend the time transferring everything over the internet.

Hybrid Data Storage

As the name implies, a hybrid solution for data storage is intended to deliver the best of both worlds. A hybrid solution entails having both an on-premise deployment as well as in-cloud service that work together to store a company’s data. 

However, even if your company does opt for a hybrid solution, the question of managed vs. unmanaged services remains. While cloud services are completely managed by third parties, on-premise solutions are typically unmanaged, unless you hire dedicated personnel to be on site. Similar to the decision of whether to go with an on-premise solution or in cloud, cost and business needs are often the biggest deciders. What you’re really deciding is which services you want to pay for or maintain by yourself. 

For example, when weighing options for what specific services to deploy on the cloud vs. on premises, considerations such as scale and latency come into effect. Specific to latency, oftentimes the speed of service on premise is a better option than going through the cloud, and hence an unmanaged service would be the most beneficial. 

Ultimately, it comes down to a cost-benefit analysis, which means asking questions such as, “How much am I willing to spend?” and “What do I think I can handle myself and what do I want handled for me?”

If you’re looking for advice, let us know how we can help.

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