Data Centers and The Cloud. Let’s Clear Up Some Questions.

 Originally published on November 24, 2017 by Patrick Gebhardt
Last updated on March 03, 2022 • 9 minute read

We’ve already had a look at unusual data centers around the globe and also at data center concepts from big industry leaders like Apple and Tesla. Today we want to take a closer look at the differences between cloud solutions and data centers, because the distinctions and particular benefits aren’t always so clear.

Firstly, let us start by asking: Is “the Cloud” somehow a data center? Are data centers somehow “the Cloud”? Both terms may sound interchangeable, but beyond either being used for IT solutions, they have little further in common. Secondly, the terms “on-premise” and “off-premise” are often used and can refer to data centers OR to the cloud. The cloud is usually an off-premise form of computing, but there also are on-premise cloud solutions, and data centers can be either on-premise or off-premise. Sound confusing? The main difference between a data center and the cloud is that in-house IT departments are usually responsible for the hardware and networking when running a data center; with the cloud, you pay another company to do that for you. Data centers are generally more attractive for companies with sensitive information since they cannot necessarily trust a third party with their data. Also, a suitable question: Is this particular service at the core of your business (so should you be able to change everything if needed), or can you move it to a standardized system?

The aforementioned can be used as a quick differentiation, but there is of course far more to consider. For example, data centers are used for running servers, networking equipment, storage devices and other equipment. So the providers of cloud services are using data centers to house their equipment, which their services run on. For cloud-hosting purposes, vendors often need and run multiple data centers in several geographic locations with specialized hardware in order to safeguard data availability during outages and other scenarios. So how do companies and organizations decide between on- and off-premise solutions? It really comes down to a small number of factors. For plenty of reasons, it may seem that cloud computing is the way to go, and as Forbes reported, there’s a lot to think through in a data center industry presumably worth more than $300Bn. Most notably, on the public cloud, you pay only for what you use. When you build your own server, you pay for it all the time. If you’re running an application that is using 100 percent of the CPU, then it might be cheaper to build the server yourself. But practically, it’s hard to keep a server running at 50 percent or more utilization all the time, since only a few apps work this way and scaling based on demand becomes difficult. With most cloud solutions, you have an almost unlimited amount of resources that you can use for scaling and dealing with peaks and troughs. If a dedicated, customizable system is needed, data centers can be more appealing than cloud solutions since it could take quite a bit of time to adopt your application or service to a specific cloud vendor.


There are pros and cons for cloud solutions as well as for using traditional data centers. And “going cloud” is not simply moving VMs to AWS, Azure or Google. Also, it’s not just about getting rid of servers. As a whole, it is the chance to rethink processes in companies and organizations, to upgrade – and to simplify them. IT departments should only concentrate on mission-critical core business systems; everything else could be ready to move to the cloud, using standardized systems – e.g. Email, HR, payroll, supply chain, procurement, performance management, sales, marketing and customer service. Before moving such services to the cloud, you can, as within every network disaster plan, ask yourself “what can I do to mitigate some of the possible risks and at what price?” Since there’s a direct correlation of investment and high availability, for the analysis you can use this formula:

(costs < (loss in revenue * probability of occurrence))

On our own internal “Cloudification” mission, we at Paessler found out that IaaS may be nice and cheap, but PaaS and SaaS are the huge leap forward. We’ve also developed a growing understanding that cloud-based computing means completely new paradigms for development, usage, management and sales of IT. Using AWS S3/Cloudfront, we faced 20% less cost, with less server-work or downtime. Our admins don’t necessarily have a smaller workload, but the nature of their daily work has changed to a more analytical one. Also, moving our Exchange to Office 365 brought a lower license cost, since we used and paid for Office 365 already. Email is the perfect example for a cloud service. Everybody needs the same functionality and you can get huge productivity gain by scaling. And since data is transmitted through the internet anyway (often unencrypted!), running your own mail server seems anachronistic. The technology researcher Gartner says, that “already 9% of today’s companies use Office 365; 5% use Google Apps”. We don’t know what the future will bring. But right now it feels like we are moving most processing- and storage-power to the cloud, and only use mobile devices as smart viewers. Also, a growing majority uses cloud- and off-premise-solutions side-by-side – for some good reasons: Companies have found various ways to optimize their usage of both worlds by placing their less confidential data on the cloud (to be more easily accessible), while placing the most essential and critical information in a data center. But there exist also mixed forms. Hybrid Cloud stands for a cloud computing environment which uses a mix of on-premises, private cloud and third-party services, with orchestration between the platforms. By allowing workloads to move between private and public clouds as computing needs and costs change, those hybrid cloud concepts give businesses more data deployment options and greater flexibility.ready.png

We hope that this, and the first two parts of our data centers series, were helpful for you. We will present a detailed check-list for on- and off-premise solutions that should be interesting to your company or organization – including a look on the concept “cloud-agnostic”. Coming soon on our blog...