The Future of Cloud vs. Self-Hosting

What are some fresh opinions on the “cloud craze”? i.e. businesses flocking to the big three cloud service providers instead of self-hosting infrastructure, applications, IT talent – etc.

We all know the cloud is really just someone else’s computer, but is there a long-term future in SMBs having their own infrastructure? Will MSPs always be able to compete with what the cloud companies charge and offer?

Besides the super-obvious ones (being dependent on Internet connectivity and the cloud provider’s infrastructure) what are some talking points you’d typically use to convince a customer to avoid going with cloud-based solutions?

The decision about what applications to host in the cloud versus on-premise largely depends on the business’s specific needs, budget, technical capacity, industry regulations, and risk tolerance. However, here are some general guidelines:

  1. Cloud-based applications

    These Cloud-based solutions have become increasingly popular due to scalability, cost-effectiveness, and ease of implementation::

    • Customer Relationship Management (CRM) Systems: Salesforce & HubSpot

    • Collaboration Tools: Google Workspace, Microsoft 365, and Slack are currently better than any of the on prem options I have tested.

    • Human Resources and Payroll: Platforms such as Gusto, BambooHR, Bonusls, Bloom Growth, or Workday.

    • Enterprise Resource Planning (ERP) Systems: Cloud-based ERPs like NetSuite, SAP Business ByDesign, and Oracle Fusion Cloud, and lots of other more niche small business tools that may not even offer an on prem version

    • Marketing Automation: Tools like Mailchimp, Marketo, or HubSpot.

  2. On-Premises applications

    Some applications may need to remain on-premise due to reasons such as data sensitivity, control, customization requirements, or industry regulations. Examples may include:

    • Highly Sensitive Data: Businesses that handle highly sensitive data such as personal health information, government classified data, or financial data may prefer on-premise solutions for added security and control.

    • Legacy Systems: Older systems that have been heavily customized or are not compatible with cloud technology we often need to be keep on-premise.

    • Industry-Specific Applications: Certain industries have specialized software that may not be available in a cloud format, or the cloud version may not meet all the unique needs of the business. We work with a lot of Movie/TV video production companies and on prem storage is still the best fit for them.

It’s not an either-or decision in many cases. Lots of businesses need a hybrid approach, where some applications are moved to the cloud and others are kept on-premise. We conduct a thorough analysis to determine what setup best meets their needs.

People ask me about apps such as RocketChat, NextCloud, self hosted email, etc… but it’s just not practical here in July of 2023 as the support costs and risks of making self hosted apps public facing is just not worth it for companies.


Many mainstream apps are offered via SaaS which is probably the best way to go when looking at the responsibility for run and maintain. Integrate it with your IDP/SIEM and off you go.

If you have to use IaaS in the public cloud there are many benefits to that as well considering the work it takes to manage an underlying infrastructure.

Either way, everything should be evaluated case by case. What works for one org may not work for another. Doing your homework is key to finding the right solution and balance of cost/responsibility/etc.

I work with many healthcare orgs in my MSP. We have to be very careful of cloud services, although their main EHR software just went to the cloud. And in classic onprem to SaaS fashion; the company promised they would onboard all historical data, guess what they didn’t. So now we have to keep the SQL instance around for another 8 years until the last records can be purged according to compliance regulations.

The techy in me kind of hates the cloud, unless you do big network projects like Tom does, you basically become L1 support and a vendor liaison. Sprinkle in a little cybersec if you don’t outsource that, I guess. Personally I’ve become super stagnated/bored in the MSP space… At least the few larger clients with on prem servers are getting converted to xcp-ng.

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