Is Your Data Really Safer On-Premises Than in the Cloud?
By Stan Kuhn - Technology director at Zoomfab
A significant number of business customers express concerns about data security when utilizing cloud services. According to a Statista survey, the top cloud security concerns among organizations are data loss and leakage (69%) and data privacy/confidentiality (66%). Additionally, 95% of organizations are moderately to extremely concerned about cloud security. These statistics highlight that a majority of businesses are apprehensive about potential data compromise or loss when storing information in the cloud.
Many businesses believe that storing data on-premises is inherently safer than keeping it in the cloud. But is this truly the case?
Security in software and server infrastructure is a vast field. In this discussion, we will focus exclusively on data security.
Let’s examine the key aspects and compare both approaches.
Hardware Failure
Hard drives—whether traditional or solid-state—can fail at any time. While RAID mirroring can help protect against such failures, have you ensured it is properly set up? Most companies run their data storage systems 24/7, but standard hard drives are not designed for continuous operation. Special enterprise-grade drives are necessary. With SSD drives situation became a bit better, however standard consumer SSD wear out faster. Enterprise-grade SSDs use higher-endurance NAND and power-loss protection.
Are your drives high grade? What is their current condition?
Even if you have a RAID setup, do you use drives from different manufacturers or at least different batches? Identical drives often fail simultaneously due to shared defects, putting your data at risk. Furthermore, servers are typically accessed only via network shares, so a disk failure might go unnoticed for months. I have personally encountered such situations.
Relying on an administrator—whether internal or external—also presents risks. Do you trust them to monitor your data diligently? Many businesses only realize their administrator was inattentive after a critical failure.
Now, let’s consider backup recovery. If a local server fails, how long would it take to replace the hardware and restore data from backups? The operational paralysis during this downtime could be extremely costly. For a manufacturing company, even a few hours of downtime can result in substantial losses.
In contrast, cloud providers offer multiple layers of protection against hardware failure. Amazon AWS service our servers are hosted with, minimizes downtime by replicating, detecting failures, and automatically recovering systems.
Cybersecurity Threats
Many companies believe their data is secure because it is behind a firewall. Unfortunately, this is often a misconception. Every computer connected to the internet is a potential entry point for attackers. If an employee’s computer has access to your server, a hacker gaining access to that computer also gains access to your data.
Even with up-to-date antivirus software, human error remains a critical weakness. Ransomware attacks are particularly devastating. Overnight, all your data can be encrypted, leaving you locked out. When you arrive at work, instead of smooth operations, you face complete chaos. If your company is profitable, you are a prime target. Hackers often demand ransom equivalent to an entire year’s profit. Are you prepared to pay?
Of course, you have backups, but restoring them takes time. Some data will be lost and must be manually re-entered. Worse, attackers often have a secondary threat—publicly leaking your data. Competitors could gain access to sensitive information, and clients will lose trust in your ability to protect their information. The reputational damage could be catastrophic.
Cloud security measures are more robust. Advanced proxy services conceal cloud servers, making them virtually invisible to attackers. If someone can discover the IP addresses of our main application and database servers, we will give them a year of service for free. Simply put, if no one knows where you are, no one can break in. These services also provide protection against DDoS attacks, ensuring uninterrupted access. Additionally, strict firewalls allow access only from a limited number of known IP addresses.
Implementing similar security measures for an on-premises setup would be prohibitively expensive. (Note: Estimate the cost of IT security services needed to protect against DDoS and ransomware attacks on local servers.)
Insider Threats and Sabotage
Although it may seem unlikely, insider threats are real. Disgruntled former employees can steal or destroy data. In a cloud environment, unauthorized access is much more difficult. USB devices cannot be plugged in to copy files, and users cannot simply select all and delete everything. Moreover, cloud backups are protected against unauthorized deletions, ensuring that data loss due to intentional sabotage can be fully recovered.
Are your local backups equally secure? If a malicious insider deletes all your backups, what would be the cost of losing all data irreversibly? The financial and operational impact would be immense.
The Importance of Backups
Regardless of the threats, robust and rapid data recovery is key. Our cloud services back up data every 15 minutes. In the event of an incident, the most you’d need to manually re-enter is 15 minutes of data. How frequently are your on-premises backups updated?
In the event of a major attack, we can restore everything in the time it takes to drink a cup of coffee. Our backups operate at the entire disk storage level, allowing for quick recovery via hot-swappable storage solutions.
How long would it take your business to recover from a serious incident? (Note: Estimate recovery costs for typical IT services restoring backups in an on-premises setup.)
Other Risks of Locally Managed Data
While we focused on the main risks, other potential threats exist, including physical damage (fire, flood, theft), software corruption, and compliance issues. Each of these factors further complicates local data management.
Final Cost Analysis
Let’s analyze the cost of recovering from incidents for companies with on-premises data storage:
- Hardware Failure: Server replacement, RAID reconfiguration, and data restoration can take 24-72 hours. Estimated cost: $5,000 - $20,000 per incident.
- Ransomware Attack: Data decryption (if paying ransom), or full system restoration from backups. Estimated cost: $50,000 - $500,000 per incident, including downtime and data recreation.
- Insider Threats & Sabotage: Investigation, damage assessment, and recovery can take weeks. Estimated cost: $10,000 - $100,000 per incident.
- DDoS or Cybersecurity Breach: IT mitigation efforts and lost revenue from downtime. Estimated cost: $20,000 - $200,000 per incident.
- General Data Loss (accidental or malicious): Recovery efforts and employee time spent re-entering data. Estimated cost: $10,000 - $50,000 per incident.
For just one data related incident, the total recovery costs could range from $5,000 to over $500,000, depending on the severity.
If the incidet involves customer data leak, your reputation costs may be costless.
Comparatively, cloud-based data security and recovery services cost a fraction of this amount annually, offering proactive protection, redundancy, and near-instant recovery.
Conclusion
The belief that on-premises data storage is inherently safer than the cloud is often misguided. Cloud providers invest heavily in redundancy, security, and backup strategies that most companies cannot match on their own. Whether it’s hardware failure, cyberattacks, insider threats, or disaster recovery, the cloud offers superior protection and rapid restoration capabilities.
Ultimately, businesses must ask themselves: is the perceived control of local storage worth the heightened risk and potential financial loss?
