Cloud technology vs local servers

Cloud technology relies on using lots of servers in various locations across a wide area network. Users login to access files from any device that is connected to the internet. Find out more about the services provided by cloud technology at Networking and connectivity.

Local servers are part of a local area network and provide users of that particular network with access to files stored on the server. Once a user logs in to a client, the local server will make their files available to them.


When a business or organisation are deciding how to best devise a networking and backup solution they are increasingly left with a choice between cloud technology and local storage. When making a final decision it is important to consider the following:

  • cost
  • accessibility
  • maintenance

Cost comparison of cloud versus local storage

InstallationInstallation costs are not applicable as the cloud provider would cover these costs and those of purchasing serversSignificant cost involved in purchasing and installing servers. Cost is likely to re-occur every 5-8 years as servers are replaced
Subscription and licensingOngoing monthly costs that tend to be higher in the short term and reduce slightly over time. Costs can relate to a range of services including online apps. Over time it may be necessary to increase access to services which would involve further ongoing costsNo subscription fees but licensing is needed for use of software to manage email servers and to use general purpose packages
MaintenanceNo cost if the servers go down as this would be managed by the cloud providerMaintenance costs would be incurred by the business
DowntimeCloud systems offer less downtime than local solutions. This is often because of the use of distributed data storage where more than one live copy of data is accessible at the same time. This means you are less likely to be offline with less risk of loss of revenue.On average, local servers have more downtime than cloud solutions. This can lead to loss of revenue if offline for longer periods of time
ElectricityNo direct additional costs for electricity when using cloud solutionsRunning a server will require power and cost money as a result, so ongoing electricity costs are higher with local storage
BandwithStoring data on the cloud means lots of uploading and downloading and this can lead to the need for a better bandwidth connection, which tends to cost more money. Some providers also add charges to subscriptions if the amount of data downloaded from the cloud exceeds a certain limit.As the amount of data being constantly uploaded and downloaded to different external servers is significantly less with a local solution, it is likely that overall internet access costs would be lower or would not need to be revised as regularly
Upgrade or scalabilityScalability is very easy when using cloud technology. Businesses do not need to manage how this is implemented, they just need to increase monthly payments to make use of more services or storageCosts that relate to installation, maintenance, electricity and possibly subscription are all likely to increase – either significantly in the short term or consistently over time


To access cloud services, an active internet connection is necessary. Users can access their cloud storage space from numerous devices, often using apps or dedicated software. To access local storage, it is usually necessary to be working on a client system within the network.

Some systems do allow external access to some files and services. Access in this way often depends upon use of browser software and may not be as convenient on mobile or tablet devices as use of dedicated cloud apps.

The main drawback of cloud services is users are dependent on having an internet connection that can support the work they wish to undertake. If they have no internet access or access with slow upload and download speeds they may not be able to make best use of cloud services.

The advantages are around 24/7 instant access where an internet connection does exist and the ability to upload and download to and from several different devices all capable of accessing content in real time.

The main drawback of local storage is the need for users to login in to a client. This means users are restricted to the physical boundary of a local area network and are unlikely to be able to access all services from out with the network.


Cloud service providers are responsible for any maintenance when using their services. A user will be unaware of maintenance taking place because cloud services use distributed data storage. Copies of their data are stored in multiple locations to protect against maintenance leading to a loss of access.

If a local server is down and requires maintenance work it is very unlikely that users will be able to access their data, certainly in the short term. It is also the case that the business is responsible for any ongoing maintenance costs.