Summary: On-Premise or Cloud-based intranet software: which is better?
At Intranet Connections, we provide both an on-premise intranet, as well as a private cloud-based solution. Unlike most affordable cloud-based intranet providers, we never use a multi-tenant cloud-based solution, we’ll explain why below:
Choosing between Cloud vs. On-Premise Intranet
Is it a…
- Accounting Decision – a monthly operating expense over a capital cost investment?
- IT Resource Constraint – a matter of hands-off server maintenance and management?
- Corporate Trend – a decision to move with ‘everyone else’ to the ‘future’ of software?
Choosing between a cloud or on-premise solution only has three significant differences: pricing, the IT capacity, and mobile needs. We explain the differences between on-premise, multi-tenant cloud, and private cloud intranet.
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Why Choose a Cloud-Based Intranet?
Launch within days
Cloud is all about convenience. When it comes to software, we’ve seen a shift from the IT department purchasers to HR, Internal Communication and Marketing. This means that software needs a focus on a simple setup, ease-of-use, and out of the box tools.
From a user-perspective, our cloud-based intranet is the exact same as our on-premise offering, except the mobile access is more seamless on a cloud. This is due to the nature of connecting to a server. That being said, if security is a top priority, a private cloud solution can also be set up in a way that it is only accessible while connected to your local network.
Less capital up front
A SaaS or cloud-based model is essentially a rental agreement, whereas an on-premise is a one-time purchase. With a cloud intranet, you’re paying on a per user/per month. Your costs fluctuate with users, but with IC’s private cloud, we charge annually. This means that your organization can grow exponentially within the year without increasing costs until the contract renewal. Depending on how your accounts payable is set up, a cloud solution may be easier from a budget approval standpoint.
No IT Team Required
With a cloud solution, you’re renting the software from us. It’s exactly like renting a condo versus owning one. You pay a little more per month than you would if you own, but you get the peace of mind knowing your landlord will handle the maintenance of the building, patch any leaks, upgrade the appliances when needed, and maintain the common areas. When you own, your upfront costs are higher, but it evens out in about 3 years. You’ll have to manage your own servers, patches, and upgrades, and you can pay a fraction of the cost for annual maintenance and unlimited product support from our stellar support team.
Cancel, and you risk losing your data
For a cloud, once you add your internal documents, your policies and procedural checklists, your employee forms, your vendor and client contacts, and the other multitude of corporate data and resources … are you likely to cancel anytime? If you do, you risk losing your data. On-Premise, however, means that that you host all of your data on your own server.
Scalability is Expensive
Can a cloud-based (SaaS) intranet grow with your business? Since cloud-based intranets charge on a per user/per employee basis, this means if you envision rapid growth, having your intranet the cost for utilizing your intranet will increase.
Loss of Control
Your intranet will be upgraded at the schedule set by your intranet software vendor. You have no control over when and what is changed. This potentially means the features/functionality of your intranet software change without you knowing about it and without any control over what is changed.
Multi-Tenant Cloud-Based Intranet Risks are High
Most affordable SaaS/cloud-based intranet models operate as a “multi-tenant” solution, which essentially means one code base to multiple customer databases (where the data is kept). For the intranet software provider, this is ideal. It means when bugs are reported you only have to fix in one file, only in one spot and it automatically is fixed for all customers. There is no doubt, it is enticing to think of washing your hands of server farms and all the hardware overhead your IT Department maintains for the organizational software requirements.
The downside to you as the customer?
You do so at the risk of not only confidential data living out in the cloud, but If your SaaS provider is compromised you could lose days of access to your corporate enterprise intranet.
With DDOS attacks and confidential data hacking on the rise, these cloud-based servers are feeling less and less secure to many of our financial, healthcare and corporate customers every day.
At Intranet Connections, we go overboard to ensure backward compatibility, particularly on design elements as we know your employees are NOT happy when things change on the intranet.
When changes are made by your intranet vendor and pushed to every client at the same time, as done in a SaaS “multi-tenant” model, you are a small fish in a big ocean, with no control over the disruptive waves.
Why Choose an On-Premise Intranet?
As a consumer, we frequently encounter choices like rent or own and lease or buy. Most would agree that in general owning is a preferred option. Although an on-premise solution costs significantly more up front, it breaks-even pretty quickly, and with IC, that breakeven pricing is under 3 years. When considering the implementation of an intranet, realize that this is an enterprise platform and often serves as a core business tool. It’s likely to be around for 5, 10 or even 15+ years, as many of our customers have been with us this long. An operating expense cost may initially look attractive, but you’ll likely pay more in the long run, your costs will typically go up as you grow, increase usage or add-on features, and it will be more difficult to budget a fixed cost over a longer period of time.
Intranet software is all-encompassing, housing your confidential information, your employee information, your “trade secrets”/intellectual property, your company financials, your corporate goals and even your customer information. This includes patient information, in the case of healthcare or member information, in the case of banks and credit unions. Have you already invested in security infrastructures like firewalls, anti-virus, anti-spam, and privacy controls? Do you intend to process sensitive client information (patient info, member info, etc.) within your intranet? Even if not, it’s likely you’re using such a portal to communicate internal strategy, corporate objectives, or share private information you wouldn’t want to be leaked to anyone outside your organization.
On-premise solutions let you oversee the testing and rollout of upgrades when you’re employees are ready. You get to decide when and what to change. You can ensure that everyone is informed, educated, and ready to use new features. If your end users struggle with constant change, it may be difficult for them to keep up with the frequent and incremental release cycle that is common with a cloud intranet or other SaaS offering.
A Fit for your Corporate Culture
One final thing to factor in is your organizational competency and experience. If the staff you have evaluating an intranet are less familiar with cloud intranet offerings and the differences in support, product lifecycle, control, and liability, then it probably won’t mesh well. It’s not only important you find something that fits your budget, but that the people you intend to own it have the skills and knowledge to implement it and make it a success.
High-Cost Up Front
Compared to cloud software, an on-premise intranet is a bigger initial investment. If you have strict budgets to follow, it may be tough requesting the full amount all at once. Just keep in mind, an on-premise intranet is much cheaper in the long run.
Launch takes time
With a completely custom solution, building out the sites takes time. Once the software is installed, the IT team can have a break, but someone (or a team) will need to take ownership to build out your site. If you’re interested in learning more about how IC is significantly easier than SharePoint, read about how our client DivShare launched their intranet is less than 90 days.
Which is Better?
Deciding between an on-premise intranet or a cloud intranet will depend on all of the above factors. Ultimately, it will all come down to understanding the difference between the two models and discovering what is best for your organization. Would you like more information? Speak with one of our product specialists.
I would love to hear your thoughts on on-premise vs. cloud intranet. Please share with me by commenting below!
Editors notes: This post was originally created in 2014, and has been updated to reflect accuracy.