Cloud, On Prem, or Hybrid – Choosing the Best Solution for Your Wholesale Distribution Company

In choosing the proper IT infrastructure for your wholesale distribution company, you need to first understand your options, and the pros and cons of each type of architecture. The technology landscape and options can be confusing. In this post, we take a look at three common methods wholesale distribution companies use in structuring their IT systems: cloud, on-premises, and hybrid. Each offers benefits but also carries risk.

Assess

Before choosing a solution, measure your mission critical needs. Everything from the types of goods you distribute to who your customers are influences which architecture is likely to best serve your needs. Whether or not your employees need to access your systems from various physical locations, the type of customer data you collect, and the supply chain demands of your business are just a few considerations.

Other things to take into account include the size of your company and your growth objectives. Scalability differs in the three types of IT architectures, so expansion is an important factor in choosing the right solution.

The impact of change on how your business functions is also something to think about. Between the pandemic and the upheavals in the supply chain in the last few years, most organizations have some experience with how change affects their operations. Completely changing your IT system is itself a change, but also whatever solution you choose should help your company become more resilient.

Making the Choice

As you evaluate potential solutions for your wholesale distribution business, it’s helpful to consider the pros and cons of each type of infrastructure. In the most basic terms, the differences have to do with location. With an on-premise infrastructure the software to run your business is installed on servers located on your premises. In a cloud infrastructure, a separate entity, called a cloud service provider (CSP) owns the servers that host your software, which is then accessed via applications or web browsers. As you might have guessed, a hybrid structure uses elements of both cloud and on-premise infrastructure.

The Pros and Cons of On-Premise

Sometimes referred to as legacy systems, on-premise infrastructures were the only available option for years. Similarly, until relatively recently, security in on-premise set-ups was superior. One of the main reasons companies choose to deploy on-premise IT operations is that they have full control of the data and applications. For businesses operating in highly regulated industries, such as healthcare, on-premise may be the only compliant choice.

But, along with the control of an on-premise environment comes often much higher capital costs, a need for specialized and qualified personnel, and a lack of flexibility. The business must purchase all of the equipment and maintain it, and sometimes extra equipment in order to create reliable backups. If the business is growing, the number of people who have access to the equipment becomes a security concern, along with the cost associated with adding more servers and people to manage them.

The Pros and Cons of Cloud Computing

In a cloud computing environment, your CSP owns, and secures, the physical equipment necessary for your IT operations. This means that you can quickly scale up or scale down by paying on an as-needed basis. The flexibility is a big advantage to using the cloud.

Another consideration is that your CSP shares responsibility for security. Generally a CSP will have access to a larger talent pool. They may also offer resources to build a strong security platform, and given the many recent, highly publicized breaches, security must be a concern.

Depending on your operations, the ability to access your IT systems from anywhere could be a big advantage to using a cloud infrastructure. Since many wholesale distributors have national or international locations, being able to access systems through a web browser or application could be an element that keeps down costs.

A Hybrid Cloud Environment

There aren’t only two choices. Along with cloud and on-premises environments, there are infrastructures that blend the two. A hybrid cloud infrastructure has elements of both on-premises and cloud environments and may use the public cloud as well as a private cloud in order to build an IT solution that works for their particular needs.

Regardless of the size of your wholesale distribution company, we can help you identify a solution that will work for your operation, and one that helps you remain compliant with appropriate regulations.