Cloud or dedicated? That’s the question companies face each time they need new storage space or resources—is it better to build local or host off site? Both tech segments are performing strongly, with the global data center blade server market to reach more than $15 billion by 2019 at a compound annual growth rate of 10.25 percent and cloud computing sitting on a $16 billion market that’s only trending up thanks to increased public and hybrid adoption. In other words, it’s virtual war: Who wins the battle?

Emergent Properties

For years, the only sensible way to store data was on local servers or in company-owned facilities off site. The advent of public cloud computing initiatives did little to sway this kind of thinking, since they were both untested and came with the specter of unknown security risks. But the rise of on-demand, secure cloud solutions has prompted many small companies to dive in headfirst and save on IT overhead—while enterprises often adopt a “wait and see” approach, using cloud services for some line-of-business activities while keeping critical data close to the chest. Some experts see the rise of cloud computing and decline of data centers as inevitable, but the market for local storage remains strong and cloud concerns persist: Things are not so simple.

Cloud Benefits

The benefits of going cloud are easy to articulate: On-demand resources and storage billed on an as-needed basis. Suddenly have an influx of big data to deal with? Spin new virtual machines and you’re ready to handle the challenge. Need a specific application or platform? Go per-instance rather than paying a yearly licensing fee. Cost is also touted as a big cloud advantage, since CapEx is replaced entirely by OpEx and you no longer need to pay for server maintenance or installation. And as noted by Data Center Knowledge, many cloud-based data centers offer the advantage of carrier-neutral connectivity, meaning you can choose the carrier that best meets your needs.

Dedicated Differences

But there’s also a case to be made for dedicated servers. First, they may outperform their cloud counterparts in some resource-intensive tasks, since all computing power is reserved for a single tenant. And while building a data center can cost $200 per square foot or more, companies get the benefit of total control over data, the hosting environment and security. While cloud environments can put companies at risk if other tenants have data seized or processes corrupted, opting for in-house steers clear of any such possibility.

The Con Conundrum

No technology solution is perfect, however—both cloud computing and dedicated servers come with unique issues.

For cloud, one large issue is cost over time. What starts out as a reasonably small OpEx can quickly grow and will eventually eclipse the cost of purchasing and maintaining new servers. And according to the Wall Street Journal the ease of cloud computing often leads to waste, with up to 60 percent of cloud servers not being used to their full potential. Downtime is also a concern, since outages are beyond local control; an iron-clad service level agreement can help limit the sting of downed servers as long as responsibilities and repercussions are clearly spelled.

Dedicated servers, meanwhile, come with the problem of scaling at speed. In a data-enriched world on the tip of massive IoT connectivity, in-house servers may not be able to cope. With cabinets running full and hot to maximize ROI, the deluge of big data can prove difficult, since local sites are built for staying power, not adaptability.

So what’s the best choice for your business? The short answer is that it depends on your needs. If on-demand applications and scalable storage are priorities, opt for the cloud. If security, compliance and pure performance are top of mind, go dedicated. There’s no easy victory here, and companies can benefit from doubly strong markets; use a bit of both, and see what sticks.