Should we invest in the Cloud or Hardware?

Should we invest in the Cloud or Hardware?


10 Years ago this question would have been rarely asked, as the cloud was new and not often used among businesses, most had their own servers and hardware. But with the advent and continued rollout of cloud technologies and innovations, organisations are having to choose between the two.

If you're asking this questions and are looking at investing in the next generation of IT, you can usually weigh up the decision by asking 4 key questions. These are;

  1. What services are we using our internet connection for?
  2. Does your business size fluctuate?
  3. Where are our staff/employees located?
  4. What programs and applications do we use?
  5. What is our budget?



All businesses (and individuals) want to have fast applications and equipment. The Cloud application speeds are dependent upon the quality and speed of your internet connection. 

The speed of your internet is greatly affected by the amount of infrastructure you need to use it to host. For example, if your business only has a website and email services for a handful of users (5-10), then you will likely not need a super-fast connection for these services and should be free to use the Cloud to host them with fast and reliable internet.

But, let’s say you also need to host your businesses backups, applications, programs and terabytes worth of data. In this case, your organisation will need a much faster connection and should either opt for in-house hardware to host everything or use a hybrid approach, using the cloud for email and lighter data services and using hardware for in-house services. You may also want to consider the option of a backup Internet link in the event of an issue with you primary service


Are your currently growing or shrinking? Do you add additional employees on for seasonal demand and busy cycles? Do you engage with large numbers of contractors who require user access? The reason we ask these questions is because cloud is a scalable technology, while hardware infrastructure is fixed in size & capacity.

When you use the cloud you can easily purchase additional storage space as needed and add additional email accounts for temporary users. For companies who are going through growth and are adding new employees this is extremely useful as they can simply purchase the additional storage space and licenses needed as needed and scale back whenever they wish. Whereas Hardware is fixed in storage space and licenses and in order to upgrade the storage space organisations need to go through a potentially expensive and sometimes cumbersome installment of new hardware.


This again partially goes back to the speed of the internet connection. The signal from the server (be it hardware or cloud) will be strongest the closer it is to the source. If your organisation has one central office where all or the majority of your employees are located then it makes sense to invest in hardware. 

However, if your organisation has separate offices, employees working from home or on the road (essentially employees who are highly dispersed), then it can make more sense to use the cloud or even make use of both hardware and cloud (known as a hybrid setup).

As a rule of thumb, users will always receive better performance from their system (in terms of speed) and lower operating costs from placing the data and infrastructure where the concentration of users are. This makes the location(s) of your staff a strong factor in deciding what software to use.


Every organisation has specific software applications necessary for the organisations operation. Some organisations will have standard off-the-shelf products which have not been customised for the organisation. These organisations can benefit from the public cloud, as many cloud vendors offer SaaS (Software as a Service) cloud versions of the applications and ensure the applications are constantly up to date, allowing the organisation to not have to worry about the ongoing warranty, management or backup of these applications or the backend costs.

Organisations that have specifically designed or customised applications often benefit from running private or hybrid cloud as they can configure their physical cloud infrastructure to better synchronize with the custom apps.


The costs of either hardware or cloud can be virtually the same, you just pay more at different times. Private Cloud requires hardware infrastructure to be installed and supported which is usually more expensive upfront, however, these costs can then be amortized over a relatively long lifespan (usually 3-5 years). Of course, this lifespan raises additional costs such as future application and hardware upgrades and warranty renewals, security, patching and support; however, these are typically much smaller than the initial investment.

Public Cloud on the other hand often has a much smaller upfront cost, but the services are often more expensive over the same time frame and usually require high-speed symmetrical internet services to be functional. It is recommended that additional backup services are leveraged. These additional services need to be accounted for as part of the total cost when comparing budgets. 



The main factors for choosing either hardware or migrating to the cloud depend primarily on your organisations set up, employee location, programs/applications most used and the strength of your internet connection. 

If you need help or are interested in discussing which option might be best for your company, please feel free to get in contact with one of our consultants by clicking here to give us a call or email send us an email.