Three Industries Where On-Premises Infrastructure Beats the Cloud

While cloud computing has become increasingly popular, there are certain industries where in-house IT infrastructure still holds a significant edge. Here’s a look at three such sectors:

The Recruitment Industry

The recruitment industry has seen significant benefits from maintaining on-premises infrastructure. Handling vast amounts of sensitive candidate data, including CV’s, interview recordings, and background checks, necessitates robust data security measures that on-premises solutions can better guarantee.

Recruitment firms often run complex algorithms for matching candidates with job openings, processing complex payroll calculations and analysing large datasets. These operations require substantial computational power and speed, which are more reliably managed with in-house IT infrastructure. Additionally, on-premises systems offer better integration with proprietary recruitment software, ensuring smoother and more efficient processes.

Moreover, the recruitment industry faces stringent data privacy regulations. On-premises solutions provide greater control over data security and compliance, minimizing the risk of breaches and ensuring adherence to regulatory standards like GDPR.

Umbrella Payroll Companies

Umbrella payroll companies manage payroll for contractors and freelancers, ensuring they receive their payments promptly while handling tax deductions and compliance with legal requirements. Given the sensitive nature of payroll data, including personal and financial information, on-premises infrastructure provides a secure environment that mitigates the risk of data breaches.

On-premises solutions also offer the computational power necessary for managing complex payroll calculations and deductions. As umbrella companies handle payroll for multiple clients, the ability to scale quickly and securely is paramount. Additionally, maintaining on-premises infrastructure allows these companies to ensure continuous operation even if there are internet connectivity issues, which is critical for meeting payment deadlines.

Payroll Bureaus

Payroll bureaus process payroll for various businesses, managing tasks such as salary calculations, tax withholdings, and benefits administration. The sensitive nature of payroll data requires robust security measures that are more easily managed with on-premises infrastructure.

On-premises solutions provide the reliability and speed needed for accurate and timely payroll processing. These systems can handle large volumes of data and complex calculations more efficiently than many cloud solutions. Additionally, payroll bureaus often need to comply with stringent data protection regulations. On-premises infrastructure allows for greater control over data security and compliance, reducing the risk of data breaches and ensuring adherence to legal standards.

Beyond Cloud-First Hype: A Balanced Approach

Despite its limitations, cloud computing can still play a valuable role in many organizations’ IT ecosystems. Many companies use on-premises equipment for complex functions and storing highly sensitive data, while employing cloud solutions for simple tools, additional capacity or less-sensitive data storage.

Rather than migrating to the cloud simply because it’s trendy and perceived to cost less and offer more flexibility, enterprises should carefully consider their specific computing needs and perform an objective cost analysis. A balanced approach, leveraging both on-premises infrastructure and cloud solutions as needed, often provides the best of both worlds.

Cost and scale certainty

Cloud and SaaS solutions often charge per transaction and the costs of these are usually completely controlled by the provider. This means that costs can very quickly escalate vs an on-premises solution where costs are typically fixed, often for years.

The distributed nature of SaaS solutions means that bespoke or custom changes are often slower to develop and roll-out, whereas on-premises allows rapid development and deployment to a single customer without affecting all.

Cloud solutions are a great option for certain scenarios, but ultimately the cloud is just ‘someone else’s server’ and companies need to decide whether they feel that if that supplier comes under heavy load, will they be scaled up, or will the provider choose to save costs and slow all their customers down? – with the cloud, that decision is in the software providers rather than the customer’s hands.

Despite the widespread rush to migrate to the cloud, cloud solutions are not always the optimal or most cost-effective choice, especially for industries that handle large, complex data sets, perform intricate mathematical calculations, possess invaluable digital intellectual property, or must adhere to stringent compliance standards. Merit Software is one of the only industry suppliers to offer customers complete freedom to choose where they host the software.