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Solutions | 4 min read

The Truth About Cloud Storage vs. Local Storage Costs

Alec Brown
Written by Alec Brown

The need for secure and accessible data has skyrocketed, driven by the transition to work-from-home and hybrid work models where file sharing is a way of life. And we can’t underestimate the potential added security risks from generative artificial intelligence (AI).

Every organization has a decision to make: where will its data be stored? Cost is often the first consideration and, yes, it’s important to weigh cloud storage vs. local storage costs to evaluate which is the better value. But there’s much more to it than that.

Let’s take a closer look at the various aspects of cloud vs. on-premise costs.

Initial Cost 

While on-premise servers allow for more control over data and the ability to add as much storage as necessary, the convenience, support and low start-up costs of cloud storage at an off-site data center cannot be ignored.

The two storage options are often compared to the rent vs. buy decision. With the cost of hardware, power consumption and the physical space needed to implement on-premise storage, a cloud solution is far less of an initial financial investment. This is especially true for businesses with smaller data needs. That said, if on-premise is best for your business, Elevity offers Hardware-as-a-Service (HAAS) and leasing options to reduce this pain point.

What’s often not considered is the ramp-up time of implementing on-site data storage solutions. It’s not uncommon for it to take months to fully integrate a new server and go live. The disruptions and labor costs can be significant. Hiring experts like Elevity can significantly reduce this implementation time.

Cloud Startup Costs
On-Premise Startup Costsx-mark_icon


Server Maintenance

Another factor to consider when deciding between cloud storage services and an on-premise system is the monthly maintenance costs. With cloud services, you are charged a set fee every month, like a subscription, that will aid in budgeting. Elevity also offers flat monthly fee maintenance programs to our fully managed clients. With monthly maintenance, the provider is responsible for upgrading the technology and keeping systems up to date with the latest security protocols and upgrades.

With on-premise servers, monthly costs are often limited to electricity, IT and management. But systems must be upgraded regularly to ensure optimal performance and reliability. With the variety of systems available, the cost of repairing or upgrading a server can vary considerably.

It’s worth noting that, because of the expense, it’s not uncommon to see some companies pushing their hardware beyond its recommended lifespan. This can lead to significant business disruption if something goes wrong. With a cloud service provider, server maintenance and upgrade costs fall on the service provider—not you.

Cloud Maintenance
On-Premise Maintenancex-mark_icon


The Definitive IT Checklist for Businesses 

Data Security

Another aspect of improper maintenance of physical storage is the potential for costly operational downtime and data loss from a security breach. Such an unexpected event could mean you won’t be able to access your files, either temporarily or permanently. Data breaches cost organizations millions each year.

The security measures taken by cloud providers are much more advanced than the majority of those deployed for on-premise servers. Most cloud-based storage providers have an entourage of IT staff who monitor their systems 24/7, so there’s less likelihood of a breach.

Cloud service providers also integrate AI for monitoring, diagnostics and predictive analysis. AI can automatically detect performance issues or unusual activities that might be an indication of a problem. Likewise, AI can use predictive analytics to alert users of potential system failures.

Security protocols for an independently managed server tucked away in a closet often pale in comparison to the rigorous security measures implemented by a cloud provider. If your organization does require in-house data storage, it’s critical to have a disaster recovery plan and leverage a managed IT provider who can offer an added layer of security.

Cloud Security

On-Premise Security


Amount of Storage

A big reason that moving to the cloud may be a cheaper data management option than an on-premise server, or vice versa, is the amount of data you need stored. Many cloud services offer free storage ranging from 5 GB to 15 GB. Most organizations already own over 1 TB of “free” storage with their Office 365 subscriptions.

Technically, you can store more data on-premise by just getting a bigger server or adding more hard drives. But unless several terabytes or petabytes of storage are needed, the higher costs of on-site data servers and storage devices are often unnecessary.

Cloud Storage
On-Premise Storage


Scaling Storage Capabilities

As your business scales, your need for data will scale with it. If your organization needs to increase its data storage, the cloud is the easiest, least expensive and fastest type of storage.

To store more data with on-premise solutions, more internal hard drives may need to be purchased. Plus, you run the risk of running out of slots for those drives, requiring the purchase of a whole new server chassis. This stair-step type of investment can be quite costly compared to a consumption-based cloud storage approach, where you pay for what you need along the way. With many cloud providers, you can give back storage space once it’s no longer needed; you can't give back a hard drive after it’s installed.

Cloud Scalabilitycheckmark_icon On-Premise Scalabilityx-mark_icon

RELATED: Virtual Desktop vs. Cloud Computing: Are They the Same?

Total Cost Of Ownership

With so many things to consider, a total cost of ownership calculator is a great tool to help determine which data storage system offers the most cost savings for your organization. The calculator lets you easily compare the overall cost against disk type, amount of RAM needed, storage environment and outbound bandwidth.

In our opinion, cloud storage benefits outweigh on-premise servers for most businesses. They’re less expensive in start-up, maintenance and support costs. However, the exact figure depends on the amount of data you need to store.

Total Cost of Ownership


To decide what data storage system is ultimately best for you, talk with a professional at Elevity who can help you identify and prioritize your data management needs. We’ll work closely with you to develop a plan suited for your organization.

Contact an expert at Elevity for an introductory consultation to review your current storage and identify potential improvements and options. From there, you can determine whether a more exhaustive review of your technology environment is in order. We’ll also help you assess your overall IT environment to identify opportunities for improvement and enhanced security. Get started by downloading our Definitive IT Checklist below.

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