The Digitalisation Dilemma:
On-Premise vs. Cloud-Based Systems
As businesses grapple with the evolving technological landscape and deal with complex legislation, the issue of where to store data is a key consideration. And, the implications go beyond just thinking about storage; it's about security, scalability, cost, and integration.
The debate between on-premise and cloud-based options has intensified with data increasing in volume and complexity.
At a basic level, the distinction between the two is easy to grasp. On-premise systems are those where the data and applications remain within a company's own servers and infrastructure. Whereas, with cloud-based systems, data is kept on servers owned and managed by third-party providers and is accessed by the internet. You begin to see the importance of cloud-based systems when you consider AWS (Amazon Web Services) is its key profit driver, with over $107 billion in revenues in 2024, with $39 billion in operating profit.
The traditional approach: on-premise systems
Historically, companies used micro PLCs (Programmable Logic Controllers) for local control and data management, networked to SCADA (Supervisory Control and Data Acquisition) or DCS (Distributed Control Systems). This setup provides built-in data management, localised storage, and basic features to optimise processes, for example temperature and flow rates.
Since the advent of Industry 4.0, there has been a push to digitalise this infrastructure. Companies are now incorporating edge gateway technology into PLCs to facilitate the transition from traditional on-premise systems.
Security and control: this is probably the key reason some businesses choose on-premise solutions. Because the data remains on-site, there is a perceived security advantage, particularly where intellectual property and potential data breaches are concerned. This is often the case where strict corporate rules limit external connections.
Integration: on-premise systems often integrate more easily with other local systems, like OSI Pi or DCS systems.
Cost structure: there will be a significant upfront capital expenditure when setting up the infrastructure involved, but there will not be any recurring subscription fees.
Challenges: one key negative factor with on-premise solutions is the time it takes to successfully implement the system. There will also likely be higher operational costs, with ongoing maintenance and local expertise needed onsite for software updates and patches. Getting the right scale for the system can also be an issue, with systems often oversized, leading to unnecessary costs.
Cloud-based systems: the innovative option
Speed and scalability: cloud systems have a clear advantage when it comes to rapid implementation. Plus, they are easy to scale up or down to suit requirements.
Cost-efficiency: another key driver for choosing cloud-based systems is their overall cost. Yes, there will be subscription fees, but these will likely be offset by potential OPEX savings, such as reduced maintenance costs.
Integration and data aggregation: using the cloud makes data aggregation from various sites much easier. Thanks to the use of standardised technologies, like APIs and MQTT, it becomes easier to share data remotely with other systems when needed.
Challenges: a reliable internet connection is vital.
Any concern about the data itself, often regarding intellectual property and sensitive production data, can be dealt with by only sending what is needed to the cloud.
Similarly, by using an independent system via 4G/LTE to access the data, the integrity of the IT or DCS systems is kept.
Differences in perspective: IT vs. OT
An interesting angle to this debate is how IT (information technology) and OT (operational technology) departments view the options. IT, usually under corporate control, places greater emphasis on security, software approvals, and governance. Whereas the OT, often controlled by field engineers or maintenance team, prioritises the smooth running of production. This can lead to friction between the two departments, particularly when looking to introduce new technologies.
What's best for you?
The data management decision will always depend upon your company's specific needs, available funds, and long-term goals.
What is clear is that as your business evolves, so too will your data management needs. Whether leaning towards the traditional on-premise route, the modern cloud-based alternative or a hybrid approach, it is important to stay informed and be flexible. A clear understanding of each approach is crucial to justifying a choice that aligns with your company's strategic vision.