The Public Cloud has been a huge success, so why are most enterprise IoT solutions deployed using on-premises or hybrid data platforms?

Internet of Things (IoT) system deployments using the public cloud have helped many companies deploy products quickly and reduced their upfront capital costs. But using the public cloud in isolation is not the favoured option for most enterprises needing to manage networks of IoT devices Instead, a large number of enterprises running IoT management workloads are currently using on-premises data centers. That is not to say that they are using on-premises solutions solely and we see that many will also pair on-premises data handling alongside a public cloud connection.

If you are a company looking at deploying IoT Devices across your organization, it is worth examining why organizations are now choosing to deploy IoT systems within an on-premise or hybrid environment rather than solely in the public cloud.

1. Efficient decision-making closer to the point of action

Organizations often want to keep decision-making at a local level rather than sending data to a centralized location for analysis and processing. For example, data that might be relevant for one factory may not be as useful to all factories within the same organization.

Using local on-premises IoT device management systems reduces organizations’ decision-making time. However, for insights that are worth sharing across the organization, there is the option to adopt a hybrid approach where some data/insights can be shared via the public cloud. The system benefit is in having local access for fast critical data use, while data it is worthwhile aggregating can be shared more universally.

2. Critical infrastructure requires zero disruption and latency

Organizations running or owning critical infrastructure often need access to operational data and the ability to provide updates and deal with any potential issues in real time. Total reliance on a public cloud as a way of managing the system is not a resilient solution as it is too vulnerable to available internet connectivity, which in itself could be part of a fault. So for critical infrastructure management, an on-premises system, or potential hybrid system, is the sensible choice to keep control where it is most needed – within the organization.

On-premises device management also provides much faster data connectivity between devices and a server, reducing latency and allowing organizations to make decisions faster and apply updates sooner.

3. Regulations: Rules and parameters that form value

Today, data protection is a key factor behind companies choosing on-premises data management solutions. Many organizations must be compliant with data and security regulations such as the GDPR which is intended to secure citizens’ personal data and mitigate threats. Beyond the GDPR and similar state controls, many organizations have now developed strict internal data rules in order to protect themselves and their customers, so being able to control their own data within a company firewall is advantageous.

4. Integrating IoT with existing systems

A physically-accessible data management system allows better integration between an organization’s network of IoT devices and existing applications and infrastructure. This gives companies instant access and administrative rights to their system, preventing or at least mitigating the many problems that can arise without complete control over their system.

Better control over their deployment also provides more centralized transparency. This gives a company visibility over all aspects of their system and the chance to deploy custom management tools.

5. Data and control in the IoT world

Companies are looking to use the IoT to unlock and unleash their data — the most valuable aspect of their business. They’re capturing, storing and processing vast amounts of data in order to transform their businesses through actionable insights that deliver new revenue streams, improve customer experiences and reduce operating costs. For example, IoT-equipped transportation companies are using sensors to monitor the engine condition, speed, mileage and fuel efficiency of their vehicles so they can optimize their delivery systems.

In the case of the transportation company, this kind of data is competitively crucial and we see companies in this position often wanting to keep this sort of data away from the public cloud for security reasons. This leads them to choose on-premises systems so they are solely in charge processing and managing their data on their own premises, using their own databases, servers and data centers.


The public cloud has transformed the way the world works, allowing operational scale and flexibility. However, many companies are now favoring on-premises or hybrid solutions for their IoT deployments. This is usually for reasons including security, regulatory-compliance, and process-control.

This demonstrates the flexibility in how companies can build their IoT management solutions. At the heart of this flexibility is the chance for organizations to exert as much, or as little, control over their own systems and data. In simple terms, giving companies the ability to choose the level of operational freedom they are comfortable with.

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