An essential question that companies often face right from the outset of their IoT projects is whether to choose an on-premises or a cloud environment to run IoT applications and manage their devices and data. Amidst the proliferation of SaaS platforms and cloud-based infrastructure over the last few decades, you might think a cloud-based IoT deployment is the way to go. However, it’s not that simple.

Public and private clouds have been widely recognized for their manifold benefits of reduced costs and complexity. Yet, many companies still turn to on-prem solutions or a hybrid approach for IoT device management and data handling for some inherent reasons. Before we look at a hybrid option, let’s weigh on-premises against cloud infrastructure for implementing IoT systems.

1. Costs

A big selling point of having an IoT system hosted in the cloud is that it removes all the heavy lifting regarding the storage and computing hardware. The significant upfront capital expense is replaced with a much lower amount of monthly subscription fee based on the actual capacity usage. Having immediate access to IT resources that would otherwise take substantial time and labor investment to build out allows you to greatly accelerate the time-to-market of your IoT project. At the same time, you can eliminate ongoing management and upkeep overheads of the hardware servers.

2. Scalability and Flexibility

The pay-as-you-go pricing model of the cloud is highly elastic and scalable for IoT deployment. With the resources readily available, you can expand or contract the computing capacity depending on data workloads at ease via a license update. On the other hand, procuring and installing new servers on-premises to keep up with the growing data traffic from connected devices isn’t such a simple undertaking. The process is typically time-consuming and labor-intensive, even for companies with strong in-house IT expertise.

3. Data Control and Compliance

A loss in data governance is among the top reasons why enterprises might want to move away from public clouds. For certain businesses, having mission-critical IoT data stored in a multi-tenant cloud environment introduces a high level of security risks. On top of that, given the tightening state controls over data privacy protection, compliance risks also need to be factored in due to uncertainty regarding data residency.

As such, it’s no surprise that many organizations are leaning toward an on-prem approach for maximum data control and authority within their firewall. Ease of data backup and recovery is another advantage, thanks to the close physical proximity of the IT infrastructure. For companies with limited in-house IT manpower, managed private clouds might provide the best balance between reduced complexity and enhanced data security.

4. System Uptime and Configuration

A cloud deployment requires an always available and extremely reliable internet connection to ensure seamless continuity of your IoT system. This poses a major challenge to far-flung, hard-to-access sites where internet connectivity is often a bottleneck. While cloud service providers are striving for minimum disruption, unforeseeable network failures due to massive data workloads and technical issues can also happen. An on-prem deployment where computing capabilities operate in an entirely controlled, internet-independent on-site environment can effectively address these challenges, providing higher system predictability, visibility and Quality-of-Service.

Another benefit of on-prem is the greater customizability when it comes to system configuration. Server hardware, security protocols and application codes can all be tailored to your specific IT requirements and integration with existing enterprise applications are readily available. On the contrary, cloud services are mostly standardized to ensure manageability on the vendor side.

5. Data Democratization

Having IoT data processed and stored in a central cloud server allows it to be accessible from virtually everywhere via a web browser. This facilitates data democratization across the organization for insightful and transparent decision-making. At the same time, you can provision, manage and update your devices and networks remotely without the need to be physically on-site. Note that not all data is worth sharing across premises, so the idea of data democratization might not always pay off to compensate for the higher security risks that come along.

Where to go from here?

As you can see, the choice between on-prem vs. cloud-based IoT deployment all boils down to the trade-off you between the above criteria. However, it isn’t necessarily one-or-the-other. As mentioned earlier, there’s also the option of a hybrid approach where you can leverage the best of both worlds. For example, part of your data that is more business-critical can be kept on-site while other data can be streamed to the cloud for universal accessibility and reduced strain on local IT infrastructures.

Whether you opt for on-prem, cloud or hybrid deployment, the key is to have a wireless IoT architecture that can afford such flexibility. Network and device management solutions like MYTHINGS Central allow users to run and manage IoT systems in any type of environment and easily connect to any backend applications. It provides you full control over your network, device and data and the complete freedom to choose the deployment model you’re most comfortable with.