Atlantic.Net Blog

Cloud Storage Services vs. On-Premises Storage: Critical Compliance Considerations

What Are Cloud Storage Services?

Cloud Storage Services offer a modern approach to data storage. Rather than storing data on physical servers within an organization, these services store data on virtual servers hosted on the internet. These servers are typically owned and managed by third-party service providers.

One of the most significant advantages of cloud storage services is scalability. Unlike on-premises storage, increasing storage capacity on the cloud is as easy as adjusting your service plan. This flexibility allows organizations to scale their storage needs based on their current requirements.

In addition to, some popular cloud storage services include Microsoft OneDrive, Google Drive, and the Elastic File Service (EFS). The primary advantage of these services is that if something happens to your computer or network, your files will remain safe and accessible on the cloud.

However, cloud storage services also come with their own set of challenges. The primary concern is data security, as data is stored on third-party servers. This requires a high level of trust in the service provider. Additionally, there can be concerns around data sovereignty, especially for organizations operating across different geographical locations.

What Is On-Premises Storage?

On-premises storage refers to the traditional data storage method where data is stored within the physical boundaries of an organization. This could be in the form of data centers, servers, or any physical storage infrastructure that the organization owns and operates.

On-premises storage offers several advantages. Firstly, it provides higher control over data as the infrastructure is within the organization’s physical boundaries. Secondly, it offers a higher assurance of data security, especially for sensitive information, as physical access to the servers can be restricted.

However, on-premises storage also comes with its challenges. It requires significant capital expenditure, as well as ongoing costs for maintenance and upgrades. It also necessitates a dedicated IT team to manage and troubleshoot the infrastructure. Additionally, scalability can be a concern as increasing data storage capacity may require additional physical infrastructure.

Key Compliance Standards and Regulations Affecting Data Storage

Compliance is a critical consideration when choosing between cloud storage services and on-premises storage. Several standards and regulations affect how data is stored, and non-compliance can lead to hefty fines and reputational damage.


The General Data Protection Regulation (GDPR) is a European Union regulation that governs how organizations handle personal data. It applies to any organization that processes the personal data of individuals within the EU, regardless of where the organization is based.

GDPR compliance requires that data be stored securely, with appropriate safeguards in place to protect against unauthorized access or data breaches. It also stipulates that individuals have the right to access their personal data, correct inaccuracies, and request the deletion of their data.

For on-premises storage, GDPR compliance can be more straightforward, as the organization has direct control over the physical servers where data is stored. However, it also places the responsibility of securing the data squarely on the organization.

For cloud storage services, GDPR compliance can be more complex. The responsibility of securing the data is shared between the organization and the cloud service provider. Therefore, it is crucial to choose a provider that can demonstrate robust security measures and GDPR compliance.


The Service Organization Control (SOC) standards are a set of auditing standards developed by the American Institute of Certified Public Accountants (AICPA). They are designed to provide assurance over a service organization’s controls that affect the user entities’ financial statement assertions.

SOC compliance is particularly relevant for cloud storage services. SOC 2, for instance, focuses on a business’s non-financial reporting controls as they relate to the security, availability, processing integrity, confidentiality, and privacy of a system.

Like GDPR, SOC compliance for cloud storage services requires a collaborative effort between the organization and the cloud service provider. The organization must ensure that the provider has the necessary controls in place to meet the SOC standards, and the provider, in turn, must be willing to undergo regular audits to demonstrate compliance.

On-Premises Storage Compliance Advantages

Complete Control Over Data Location and Security Measures

When it comes to on-premises storage, one of the most significant advantages is the control organizations have over their data. With on-premises storage, data is stored on servers located within the organization’s physical location. This means that the organization has complete control over where their data is stored and the security measures put in place to protect it.

With this control, comes the ability to customize the infrastructure according to the specific needs of the organization. These could be based on the type of data being handled, the scale of operations, or the industry-specific regulations that the organization needs to comply with. This level of control is particularly important for organizations operating in highly regulated industries.

Easier to Ensure Data Sovereignty and Meet Locality-Specific Regulations

Data sovereignty refers to the concept that data is subject to the laws of the country in which it is located. With on-premises storage, organizations can ensure that their data is stored within their own country, thereby making it easier to comply with locality-specific regulations.

For instance, some countries have stringent regulations when it comes to data protection and privacy. These regulations specify that certain types of data must be stored within the country and cannot be transferred internationally. With on-premises storage, organizations can ensure that they are compliant with these laws.

Direct Oversight of Compliance and Security Protocols

Another advantage of on-premises storage is the direct oversight of compliance and security protocols. With the data stored on-site, organizations have the ability to monitor and manage the security protocols in place directly.

This not only ensures that the organization complies with the relevant regulations, but also provides a sense of control over the data. In the event of a security breach or other incident, the organization can quickly respond and take appropriate action. This is a level of control and oversight that is often not possible with cloud storage services.

Cloud Storage Services Compliance Advantages

Flexibility in Meeting Diverse Regulatory Requirements

Cloud storage services offer flexibility in meeting diverse regulatory requirements, making them an attractive option for organizations operating across various jurisdictions. These services are designed to adapt to different regulatory environments, providing compliance solutions that cater to the specific needs of different sectors and regions.

For instance, a multinational corporation might need to comply with GDPR in Europe, HIPAA in the United States, and other local regulations in different countries where it operates. Cloud storage providers often have the infrastructure and legal frameworks in place to meet these diverse requirements, reducing cost and complexity for organizations.

Advanced Security Measures Provided by Cloud Service Providers

While on-premises storage allows for direct control over security protocols, cloud storage services often come with advanced security measures that are hard to match. These providers have huge, dedicated security teams that work to ensure data protection.

From encryption at rest and in transit, to advanced threat detection and response capabilities, cloud storage providers often employ state-of-the-art security measures. This not only ensures compliance with regulatory requirements but also provides an additional layer of protection against cyber threats.

Regular Updates to Comply with the Latest Regulations

Finally, cloud storage services are regularly updated to comply with the latest regulations. Regulatory requirements around data protection and privacy are constantly evolving. Cloud storage providers have the resources and expertise to keep up with these changes and ensure that their services are always compliant.

This takes the burden off organizations, who otherwise would have to constantly monitor changes in regulations and update their on-premises storage infrastructure accordingly.

Cloud Storage Services vs. On-Premises Storage: How to Choose?

Compliance Requirements

When comparing cloud storage services with on-premises storage, compliance requirements are a crucial factor. This is particularly true for industries that are heavily regulated, such as healthcare, finance, and government. These sectors frequently deal with sensitive information that demands stringent compliance with data protection laws and regulations.

Cloud providers often have robust compliance programs to adhere to various regulatory standards. They invest heavily in security measures and conduct regular audits to ensure they meet compliance regulations. However, it’s essential to remember that although the cloud provider is responsible for the security of the cloud, you are responsible for the security of your data in the cloud.

On the other hand, on-premises storage gives you total control over your data, including its security. This can be particularly beneficial for businesses with strict compliance requirements as it allows them to manage data security according to their specific needs. However, it’s crucial to note that this increased control also comes with increased responsibility. It’s up to you to ensure that your data is protected and compliant with relevant regulations.

Data Sovereignty and Privacy

Data sovereignty and privacy are other critical considerations when choosing between cloud and on-premises storage. Data sovereignty refers to the fact that digital data is subject to the laws of the country in which it’s located. This can pose challenges when using cloud storage services, as your data might be stored in multiple locations worldwide.

Cloud providers often have multiple data centers spread across different countries, which could potentially lead to data sovereignty issues. Depending on the jurisdictions involved, your data may be subject to foreign laws and regulations, which may not provide the same level of data protection as your home country.

On-premises storage, in contrast, ensures that your data remains within your organization’s physical location. This means you have full control over where your data resides and the laws that govern it. However, this also means you bear the responsibility for ensuring that your data is properly protected and compliant with local data sovereignty laws.

Risk Management

Risk management is another vital factor in the cloud vs. on-premises storage debate. Both options come with their unique set of risks that need to be managed effectively.

With cloud storage services, the risks mainly stem from the shared responsibility model. While the cloud provider is responsible for securing the cloud infrastructure, you are responsible for securing your data within the cloud. This includes managing user access, data encryption, and data backups. There’s also the risk of vendor lock-in, where you become overly reliant on a single cloud provider and find it difficult to switch providers or move your data back on-premises.

On-premises storage, on the other hand, comes with its risks. These include hardware failures, natural disasters, and security breaches. Since you have full control over your data, you are solely responsible for managing these risks. This includes investing in appropriate security measures, maintaining hardware, and ensuring data backups are carried out regularly.

Vendor Assessment

Finally, vendor assessment is a critical part of choosing between cloud storage services and on-premises storage. This involves evaluating potential vendors based on their ability to meet your specific business needs and compliance requirements.

When assessing cloud providers, it’s important to consider their security measures, compliance certifications, and data center locations. It’s also essential to evaluate their service level agreements (SLAs) to understand their commitments regarding data availability and recovery

In contrast, when considering on-premises storage, the evaluation process is more focused on hardware and software providers. This includes assessing the reliability of their hardware, the capabilities of their software, and their support services.

In conclusion, choosing between cloud storage services and on-premises storage involves careful consideration of multiple factors. Compliance requirements, data sovereignty and privacy, risk management, and vendor assessment all play a critical role in this decision.

Get a $250 Credit and Access to Our Free Tier!

Free Tier includes:
G3.2GB Cloud VPS a Free to Use for One Year
50 GB of Block Storage Free to Use for One Year
50 GB of Snapshots Free to Use for One Year