Cloud-based vs Traditional databases: which one should you choose?

Explore the decisive factors between cloud-based and traditional databases to determine the best fit for your business’s data management needs.

Key takeaways

• Core Differences: Traditional databases operate on-premises, ideal for structured data and direct access. Cloud-based databases offer scalability and flexibility, accessible from anywhere.
• Performance vs. Scalability: Traditional databases excel in speed but lack scalability. Cloud solutions provide easy scaling and global accessibility.
• Security and Data Control: Traditional databases allow full control over security. Cloud databases offer robust security managed by vendors but limit direct control.
• Cost Implications: Traditional databases have higher initial costs; cloud-based models reduce upfront expenses with pay-as-you-go pricing.
• Business Fit: Traditional is suited for businesses needing data control and instant access. Cloud-based fits remote operations and those requiring scalability.
• Hybrid Option: Combining both can offer comprehensive benefits, tailored to specific business needs and security requirements.
• Choosing the Right Model: Decision depends on the business’s size, data sensitivity, and operational needs, with hybrid solutions as a balanced option.

Storing data

Almost all businesses in our digital era rely on data in some form or another. Considered the “new oil” powering Industry 4.0, technology-enabled businesses generate essential data that is gathered, stored, and analysed to inform crucial business decisions. 

Databases are structured collections of digitally stored data which allow organisations to maintain, evaluate, and organise essential information from a centralised system. They ensure data is accessible, secure, and correct. 

Having a database management system is thus essential for any modern business. Depending on your business requirements, the only question is how to choose a database type: traditional or cloud-based. 

Traditional and cloud-based databases explained

Traditional databases are physical servers which are managed and operated on a business’s premises. Based on a predetermined and unchangeable pattern, traditional databases only work with structured data that can be stored in tables or relational databases. However, most data is unstructured, so alternative methods of storing and processing it are required. 

Cloud-based databases operate in a cloud environment – information is stored in various private, public, or hybrid cloud off-site servers accessed by the internet. Cloud databases are commonly offered as a database-as-a-service (DBaaS) and are run by in-house IT teams. They are simple to install and reconfigure, allowing teams to be able to easily evaluate, authenticate, and trial new business concepts. 

Performance, scalability, and reliability

Traditional databases provide immediate access to data which can often be quicker than cloud-based systems. This is because on-site data does not share network resources with other entities which can reduce data delivery speed. Furthermore, traditional databases are powered by physical on-site servers which do not require an internet connection to access, providing rapid data delivery.

Traditional databases are not as scalable and flexible as cloud-based systems. This is due to the predetermined and unchangeable system pattern which benefits structured data stored in tables or relational databases.

On-site databases provide businesses with a firm grasp of their data integrity. When data is transferred to off-site facilities such as the cloud, the integrity of the data – and the business – is jeopardised. This is because the number of external influences that have access to the data increases, driving the potential for risks such as data tampering and interception. 

Traditional databases also provide more scope for data management. While more maintenance is required, on-site databases provide more control over the entire stack and infrastructure. 

Cloud-based databases provide all of the advantages of cloud computing, including speed, flexibility, scalability, and reduced cost. The primary advantage of cloud databases is their ability to scale according to evolving business requirements, providing greater flexibility for growing organisations.  

While the speed of data delivery is dependent upon the cloud network, this is usually not an issue as internet connections are continuing to become faster and more reliable. Most cloud network vendors provide rapid access to database systems and connectivity or throttling problems seldom occur.

Cloud vendors are responsible for the majority of management processes, such as networks, underlying systems and security. This means organisations are assured their data is durable, properly managed, and always available.

Security and data protection

Traditional databases provided businesses with complete access and control over their data without any outside interference. It also means businesses are able to secure their data in any way they want. While employing specialists to secure data can be expensive, businesses can enjoy peace of mind knowing their data security and customised encryption is in their hands.

When it comes to disaster recovery and data backup, the physical nature of traditional databases poses a few security risks – hardware failure, damage, negligence, theft, etc. 

Government data compliancy can be costly to set up and maintain over time with traditional databases. It requires specialised IT professionals such as DevSecOps engineers to ensure all compliance protocols are met. This ongoing service can become costly in the long run.

Cloud-based databases provide robust multilayered security protocols and policies to help protect customer data. These technologies are continuously updated and managed, providing consistent security without compromising functionality.

Cloud-based databases do not provide unrestricted control over the database or server as is the case with traditional databases. Vendors possess ultimate control and access to systems and servers. The drawback is that businesses have no say in what programs or systems are used as they are predetermined and selected by cloud service providers.

The intangible nature of cloud-based systems means that disaster recovery and data backup is simple. As data is stored across multiple off-site servers managed by cloud providers, data security and backup are almost always devoid of the risk of damage, failure, or theft. Vendors ensure that data is safe and secure at all times with robust encryption for ultimate protection.

Regarding government regulations and data compliance, cloud-based databases can potentially pose a risk. This is because the security and safety of the data is not in the hands of businesses, but in the hands of vendors instead. This centralised control can cause potential issues and vulnerabilities as organisations have no power over their valuable and sensitive data.

Cost and resource management

The upfront costs of creating an in-house database can be very high. It requires specialists to set up a database server. It also requires more physical space on-site, which could have office rent increase implications. 

Additionally, it is costly to maintain and manage on-site servers as it requires IT professionals at all times. Outsourcing or insourcing this requirement still comes at a cost. Furthermore, it is expensive to scale a traditional database as it requires IT professionals to add software and hardware to accommodate growth. This requirement will be needed at each stage of scalability, making it a costly recurring expense.

Cloud-based databases don’t require upfront costs when renting from a database-as-a-service (DBaaS) provider. As they are hosted in the provider’s data centres, the costs of hardware (servers, network devices, etc.) and more office space rent are removed. 

The monthly/yearly DBaaS subscription-based model means businesses can consider it an operational rather than a capital expense. Maintenance fees are usually lower with DBaaS vendors, lowering costs significantly. The flexibility provided by cloud-based systems means businesses only pay for what they use. 

However, depending on an organisation’s strategy, a monthly subscription fee might eventually outweigh the upfront costs of a traditional database. But this is not common, as on-site databases require regular maintenance and upgrades that keep expenditures running.

Business requirements

Deciding between traditional and cloud-based databases depends on the type of your business and your operational and strategic requirements. 

Traditional databases are better suited to smaller organisations that handle highly sensitive data that requires having ultimate control over it. Businesses that depend on rapid access to data with the ability to manage it as and when required will benefit from on-site databases. 

Integration concerns are easily manageable with in-house databases as they are managed by professionals who can find the right systems to integrate with existing applications.

This type of database suits companies that are highly competent with their IT and data management processes that need fully customisable databases according to specific requirements. However, this access to control can be costly.

Cloud-based databases are better suited to larger businesses and global corporations due to their better accessibility than on-site systems. Companies that have adopted the remote/hybrid working approach will also require internet-powered server access provided by cloud-based systems.

Being physically serverless means organisations can access data from anywhere at any time, driving performance output.

However, there are some concerns with cloud-based systems when it comes to integration. As most DBsaaS subscriptions provide out-of-the-box applications, integration with an organisation’s existing applications and systems might be difficult. Without ultimate control over the applications used by cloud vendors, businesses might not be able to use the tools they want and integration costs might be high.

Conclusion

The benefits and drawbacks of traditional and cloud-based data management systems will only become clear when considered within your specific business context. Modern businesses thrive using one or the other depending on their business type, requirements, and budget.

If both options sound beneficial, you can always choose a hybrid of both. Hybrid data storage offers the best of both worlds by using both storage methods for ultimate security.

Some companies store their primary data in on-site servers and back up their data on the cloud. While this is a significantly more costly endeavour, safeguarding your valuable data that is the very fabric of your business might be worth it in the long run.

Dmitry Ermakov

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