Azure VS On Premise Cost

The biggest reason behind companies shifting to Azure is that it takes considerably lesser cost than any on-premise technology. Now, companies need not store data in disks anymore as the cloud offers enormous storage space, saving money and resources.

Given the level of competition and the costly repercussions of one wrong move, it’s worth questioning “why” and “what” in all of your technology decisions. Replacing on-premises systems with a cloud suite such as Microsoft Azure has recently gained substantially more momentum. IDC estimates that worldwide spending on cloud services is set to grow at 19.4 % annually, to more than $141 billion by 2019.


The difference between the technology driver cost and the business driver efficiency is often misunderstood. Although efficiency can lead to cost savings, the cost driver focuses on reducing the cost of IT licenses or operations and/or redefining the cost model for technology solutions.


So why would you choose Azure over On-Premise?

We understand that cloud-based services like Azure are the new black, but this does not mean you should go ahead and jump to a new technology without learning about it. There must be some reasonable explanation to choose Azure cloud-based services and the like. So businesses must look into how Azure syncs with the business needs and work style and then make the choice.



Before there was a cloud, on-premise was the only option for businesses. Which means you keep the data secure on local servers, and have LAN that connects servers and workstations. Businesses needed IT admins to manage their local server and also their Local Area Network.

But as issues arise with scalability, high maintenance cost, and also the risks involved with physical and virtual security, so businesses had to look for a better alternative.

Microsoft Azure

Microsoft Azure is the latest technology, based on cloud-based services specifically designed for businesses. Businesses have an option to go full cloud or follow a hybrid approach, with the gradual switch from on-premise to cloud.



When it comes to speed, Microsoft Azure is well ahead of the on-premise solution in terms of deployment speed, operation, and speed of scalability.

For example, if you want to expand your operations, team, or workload, Azure is easier and faster to adapt to new changes compared to on-premise that may need new machines, more power, servers, cooling capacity, and physical space etc.

Agility with Azure VM

This is one of the most powerful features in Azure. Azure VM (Virtual Machines) allows you to create your own customised virtual machines within seconds by defining an operating system, language, and workload. Something that is not possible with on-premise as you need multiple machines for multiple operating systems.

This makes it easier for businesses to experiment more. They can test, develop, and get feedback working on different virtual machines in a faster way. This provides more flexibility as your teams can do more with their machines. The ability to switch between Linux or Windows on the same machine, with a different set of tools and applications, that too within seconds, is a powerful feature for employees.

Azure Active Directory (AD)

Azure Active Directory is another key benefit over on-premise LAN with the domain controller. With Azure AD (which is a multi-tenant, cloud-based directory and identity management service), IT admins can give employees single sign-on (SSO) access to multiple cloud SaaS applications like DropBox, Office 365 and more.

In addition, it offers an extensive suite of identity management services which include device registration, multi-factor authentication, role-based access control, self-service group management, application usage monitoring and few more features. These services allow businesses to keep control of processes and to secure cloud-based application and their usage.

Cost Effective

Here is the biggest concern of businesses, the ultimate question – does it make financial sense for your business? In most cases, it does, by a good margin. With Azure, you don’t have to invest in new machines, infrastructure, or replace aging servers. You don’t need more space for infrastructure and servers.

Azure, on the other hand, offers flexible expenditure which means, you pay according to your needs. You pay more to get more. You can also save on energy, space, and cooling costs you need for on-premise servers and other machines. So the savings and benefits keep coming.


For many businesses, security is the key reason why they want to stick with on-premise. With locally hosted data, some people believe that they have better data security compared to cloud-based storage.

But this is nothing but a myth. Azure services (like active directory and Vnet) make sure that businesses enjoy top-notch security for their data. There are other features like Single Sign-on (SSO) that eliminates the risk of password hacks.

Azure not only provides better virtual security for your data but it completely eliminates the risk of physical security as you don’t have on-premise servers to take care of in your buildings.

Cloud vs. On-Premise Cost Comparison

Comparing cloud and on-site storage costs can be misleading, mainly because of false assumptions. For example, the general idea is that public clouds are cheaper than on-site storage. But many companies are faced with a cool bill that they did not expect. Do not assume the price of cloud storage. We must investigate very carefully.

“Cost” has different meanings. For example, there is the cost of purchasing local resources and using cloud resources. In principle, it is advisable to identify underutilized storage resources before determining the required capacity. Buying or over-buying assets is a common cry.

For public clouds, pay-as-you-go may seem worthwhile until unused resources (such as virtual machines) remain unattended for hours, days, weeks, or even months. No. Similarly, prepaid public cloud capacity may seem attractive because it tends to be cheaper than pay-as-you-go. However, prepayment of unused resources entails unnecessary costs.