The Ultimate On-Premises Server Guide: Key Factors You Need to Know
Updated at Aug 13th 20241 min read
Despite the explosion of cloud computing, more than 60% of enterprises still rely on on-premises servers for critical data management, according to a new report from Gartner, underscoring the enduring appeal of local control and security in today's data-driven world. For a better understanding, let's take a deeper look at what this type of server is and how it works in on-premises data centers.
What is an On-Premises Server?
Talking about the definition, a server being managed individually by an organization is defined as an on-premises one. It is a common misconception that on-premises servers have to be physical, which is not necessarily the case. For instance, if your organization has a server hosted on a network that is in your control, it would also be counted as an example of on-premises servers.
Every server that is an on-premises one is available locally on your machines. This means that the employees of your organization do not need an internet connection to access the server. On the contrary, if this server is hosted in a data center, it requires a VPN or a direct connection.
How Does an On-Premises Server Work?
On-premises servers enable the storage of data within the premises of your organization. All the hardware and relevant software infrastructure is also present within the organization and is being managed individually by the IT team at the workplace. Stored data is readily available to the users of the organization and access does not require an internet connection. Where it gives you complete control over the data, responsibility for the risks involved also resides with the people managing it.
As their name implies, on-premises environments have computing resources and systems that are physically located within an organization’s premises or facilities. This gives them direct control and ownership of their IT infrastructure, including the physical infrastructure, security measures, on-premises software, and on-premises gateways. This means they are also responsible for establishment, procuring, installing, configuring, and managing all the necessary components as well as ensuring their maintenance, upgrades, backups, and security.
Key Factors for On-Premises Server
Several factors involved in choosing the type of server for your organization still impact the decision. Let's list the key factors that influence an organization's choice of on-premises servers.

Performance
Zero Latency: Everything you host is highly responsive for on-site users.
Complete Control: Teams can fine-tune hardware performance to meet specific needs.
Maximized Performance: Specialized networking equipment and software settings can be used.
Note: Significant equipment investment and a skilled technical team are essential to optimize your system for maximum performance.
Costs
Team Expertise: Requires experienced personnel for setup and management.
Software Licenses: Necessary for operating various applications.
Facilities: Must have sufficient power and cooling equipment.
Training: Staff need proper training.
Implementation: Customization is often required.
Operating Costs: Includes power bills and salaries for maintenance staff.
Performance Tuning: Ongoing optimization is essential.
Upgrades and Repairs: Regular updates and fixes are necessary.
Long-term Savings: Though upfront and follow-up costs are high, over time, on-premises servers can be more cost-effective than cloud computing for large companies, so on-premises servers are more suitable as a long-term strategy for large companies.
Day-to-Day Maintenance
On-premises Hardware and Software: Requires regular updates, troubleshooting, and repairs.
Monitoring: Constantly check infrastructure and system logs.
Backups: Perform regular data backups.
Configurations: Manage and optimize settings.
Disaster Recovery: Define and manage business continuity plans.
Physical Security: Ensure secure and controlled environments.
Hardware Replacement: Upgrade or replace components as needed.
A dedicated team is necessary to manage these tasks effectively.
Level of Control
Custom Infrastructure: Tailor the setup to meet specific needs.
Hardware Choices: Select the best components for workloads.
Configuration: Optimize performance and security settings.
On-premises data centers allow teams to retain complete control over their data.
Security
Threat Modeling: Identify and mitigate potential threats.
Security Measures: Implement firewalls, intrusion detection, encryption, access controls, encryption, network segmentation, routine check of on-premises data gateway, and more.
Monitoring: Watch for breaches, leaks, and data corruption.
System Updates: Keep security systems current.
Vulnerability Management: Discover and patch vulnerabilities.
Incident Response: Prepare for and respond to security incidents.
Disaster Recovery: Set up robust disaster recovery (DR) measures.
Companies that rely on on-premises server must also consider potential physical threats, such as unauthorized server access or damage from local natural disasters.
Scalability
Scaling on-premises servers is challenging:
Scaling up (horizontally or vertically) requires you to purchase new components, take the current system offline, add new hardware, and fine-tune the server. The process requires significant lead time, causes downtime, and impacts business agility.
Scaling down requires you to turn off servers and remove previously purchased components.
Every on-premises data center has physical limits, restricting scalability based on available space and hardware capacity.
Questions to Ask Before Choosing On-Premises Servers
Allocated Budget: Consider the necessary upfront costs for hardware and maintenance before choosing an on-premises server.
Ongoing Costs: Understand the difference between CapEx (Capital Expenditures) and OpEx (Operational Expenditures) to determine whether on-premises or cloud systems are more financially sensible for your business.
Existing Resources: If your organization has legacy systems or already possesses servers and multiple technicians, consider on-premises server deployments for seamless integration with your existing environment.
Workload Types: For workloads that require consistently high performance or low latency, such as real-time data analytics or advanced simulations, on-premises devices are typically more suitable.
Required Control Level: On-premises data centers are ideal if you need complete control over your infrastructure. They are also preferable if your use case requires significant customization.
In-House Security: Assess how many security tasks your in-house team can handle. If your team is small or lacks experience, on-premises deployment may not be the safest choice.
Scalability Requirements: For use cases with sudden usage spikes or frequent low traffic, on-premises deployment may not be ideal. Cloud computing is often more cost-effective, allowing for quick and easy resource scaling based on current needs.
Compliance Requirements: If you need to adhere to strict compliance standards (e.g., HIPAA or PCI-DSS) in highly regulated industries like finance or healthcare, on-premises hosting is a safer option. It allows you to maintain full control over sensitive data and implement custom security measures.
Data Sensitivity: If your organization deals with highly sensitive data, such as a government agency or defense contractor, keeping your data locally can minimize the risks associated with external data storage.
FS: On-Premises Data center Customization Specialist
If you've decided to set up an on-premises server, our article on data center infrastructure design provides valuable tips to help ensure a high return on investment. After mastering the basics of data center design, here you can further learn how to organize server racks.
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