Home > Security and Compliance Blog > Managed File Transfer > Cloud vs. On-premise Managed File Transfer: Which Deployment is Best?

Cloud vs. On-premise Managed File Transfer: Which Deployment is Best?

by Bob Ertl updated February 9, 2024 Managed File Transfer

Reading Time: 6 minutes

Managed File Transfer (MFT) is a technology solution that enables businesses to manage and control the secure transfer of data from one location to another. With managed file transfer, businesses can send large files and bulk files, monitor file transfer status, and automatically retry or back up data transfers that fail, ensuring critical information is securely, efficiently and reliably transferred.

Businesses value managed file transfer for its enhanced security, automation, and compliance capabilities. In an environment where data breaches are increasingly prevalent and costly, managed file transfer offers robust data protection mechanisms, including encryption and advanced user authorization controls. File transfer automation also frees up IT staff’s time to focus on other critical tasks, while built–in audit logs help businesses efficiently meet compliance requirements.

Still debating between FTP and managed file transfer? Here are six reasons why managed file transfer is better than FTP .

Managed File Transfer Deployment Options

Businesses considering a managed file transfer solution typically must choose between two deployment options: on–premise or in the cloud. An on–premise managed file transfer solution is deployed and managed locally, within the company’s physical IT environment. A cloud–based managed file transfer solution, by contrast, is hosted, managed, and maintained in a data warehouse by a third–party like a managed security service provider (MSSP).

These deployment types have their strengths and weaknesses, and choosing one over the other often boils down to an organization’s specific requirements, budget, and existing infrastructure. Understanding the pros and cons of each deployment model plays a critical role in choosing the right managed file transfer solution for your business.

On–Premise Managed File Transfer: Advantages and Disadvantages

The key advantage of an on–premise managed file transfer deployment is the level of control it offers. Businesses have complete control over their MFT environment, including customization, updates, and security. This control can be vital for businesses with stringent compliance requirements or complex, proprietary systems.

Another advantage of on–premise managed file transfer is its performance. Since the infrastructure is located on–site, data transfer speeds are often superior compared to cloud–based solutions, especially for transferring large data sets within the local network.

However, an on–premise managed file transfer deployment also comes with several disadvantages. The upfront costs for hardware, software, and implementation can be significantly high. Additionally, ongoing costs for maintenance, upgrades, and energy consumption can add up over time.

Furthermore, on–premise MFT solutions are less scalable than their cloud counterparts. Scaling up requires procuring, installing, and configuring additional hardware, which can be time–consuming and costly.

Cloud–Based Managed File Transfer: Advantages and Disadvantages

Cloud–based managed file transfer deployments offer several noteworthy benefits. One of the most significant is scalability. Cloud MFT solutions can easily scale up or down to meet changing data volumes, making them an ideal choice for businesses experiencing rapid growth or those with fluctuating data transfer needs.

Another advantage is the reduction in upfront and ongoing expense. With cloud–based managed file transfer, businesses can avoid the high upfront costs of hardware, software, and implementation, plus the ongoing maintenance costs associated with on–premise solutions. Cloud providers typically offer subscription–based pricing, making it easier to predict and manage expenses.

However, cloud managed file transfer deployments are not without their disadvantages. Businesses may have less control over their data, as it is stored and managed by a third-party provider. Misconfigurations, a common cyber threat in which security features are mistakenly turned off (or mistakenly not turned on) highlight the debate over who is responsible for system security: the data owner or the third–party service provider. Data transfer speeds may also be slower, especially if large volumes of data are transferred frequently or if the business has a slow internet connection.

Furthermore, while most cloud providers offer robust security measures, data stored in the cloud may be more at risk of breaches due to multi–tenant server environments and the inherently public nature of the Internet.

Key Considerations for Choosing a Managed File Transfer Deployment Model

When deciding between an on–premise and cloud–based managed file transfer deployment, there are several key considerations to keep in mind. These include cost, control and customization, scalability, performance, and security.

On–premise vs. Cloud Managed File Transfer: Cost

Cost is a significant factor in any technology decision. On–premise managed file transfer deployments typically involve higher upfront costs, including the purchase of hardware and software and the cost of implementation. On the other hand, the subscription–based pricing model of cloud managed file transfer deployments can reduce upfront costs, but there may be ongoing costs related to service, maintenance, data storage, and/or transfer volumes.

On–premise vs. Cloud Managed File Transfer: Control and Customization

An on–premise managed file transfer solution allows businesses to maintain complete control over their environment and customize it to meet their unique needs. However, this can require significant IT resources. In contrast, cloud MFT deployments offer less control and customization options, but they offload much of the IT management burden to the provider.

On–premise vs. Cloud Managed File Transfer: Scalability

On–premise MFT solutions can be more difficult to scale, as they require the purchase and installation of additional hardware. On the other hand, cloud managed file transfer solutions can quickly scale up or down to meet changing business needs, which can be particularly beneficial for rapidly growing businesses or those with fluctuating data transfer volumes.

On–premise vs. Cloud Managed File Transfer: Performance

On–premise managed file transfer solutions often offer more control and higher speeds, limited only by your infrastructure’s capability. Conversely, cloud–managed file transfer solutions can offer greater scalability, often handling larger volumes of transfers without needing hardware upgrades.

Also, cloud deployments are hosted by cloud service providers (CSPs) who often have several servers worldwide, reducing latency by holding data geographically closer to clients. Cloud solutions, however, might experience performance issues during heavy internet traffic and rely heavily on the stability of your internet connection. On–premise solutions, by contrast, are less reliant on external factors, making them more reliable in some scenarios.

On–premise vs. Cloud Managed File Transfer: Security

On–premise managed file transfer solutions offer direct control over all data, including transit and storage. A properly secured on–premise MFT system can offer higher defense against cyber threats, depending upon an organization’s cybersecurity budget and cybersecurity focus.

Cloud–based solutions, however, have noteworthy security advantages, too. They typically have a centralized, comprehensive security infrastructure and dedicated staff to regularly update their security protocols to counteract new threats. But, security levels depend on the provider’s competence and commitment to data safety. Overall, both systems have their strengths and weaknesses and the choice boils down to specific business needs and the ability to manage risks.

Choosing the Right Deployment for Your Business

Ultimately, the right deployment for your business depends on your unique needs and circumstances. Some businesses may find that the control and customization offered by an on–premise managed file transfer deployment fits their needs best. Others may find that the scalability and cost–effectiveness of a cloud managed file transfer deployment make it the better option.

It’s important to thoroughly analyze your business’s file transfer needs, regulatory compliance requirements, IT resources, and budget before making an investment decision. Additionally, working with an experienced managed file transfer provider can help guide you through the process of choosing and implementing the right managed file transfer solution for your business.

Kiteworks Secure Managed File Transfer Provides Organizations With Extensive Deployment Flexibility

In summary, both on–premise and cloud–based managed file transfer deployments have their strengths and weaknesses. On–premise managed file transfer solutions offer greater control and performance, particularly for businesses with stringent compliance requirements or those transferring large data volumes within a local network. However, they can also be costlier and less scalable.

Cloud–based managed file transfer solutions, on the other hand, offer cost advantages, scalability, and reduced IT management requirements. Yet, they come with potentially slower data transfer speeds, less control, and different security considerations due to the public nature of the Internet.

The perfect solution will ultimately depend on the unique circumstances and requirements of your business. By understanding the trade–offs and consulting with an experienced provider, you can ensure you choose the managed file transfer deployment that delivers the best balance of cost, control, performance, and security for your organization.

The Kiteworks Private Content Network, a FIPS 140-2 Level validated secure file sharing and file transfer platform, consolidates email, file sharing, web forms, SFTP and managed file transfer, so organizations control, protect, and track every file as it enters and exits the organization.

Kiteworks secure managed file transfer provides robust automation, reliable, scalable operations management, and simple, code-free forms and visual editing. It is designed with a focus on security, visibility, and compliance. In fact, Kiteworks handles all the logging, governance, and security requirements with centralized policy administration while a hardened virtual appliance protects data and metadata from malicious insiders and advanced persistent threats. As a result, businesses can transfer files securely while maintaining compliance with relevant regulations

Kiteworks secure managed file transfer supports flexible flows to transfer files between various types of data sources and destinations over a variety of protocols. In addition, the solution provides an array of authoring and management functions, including an Operations Web Console, drag-and-drop flow authoring, declarative custom operators, and the ability to run on schedule, event, file detection, or manually.

Finally, Kiteworks Secure MFT Client provides access to commonly-used repositories such as Kiteworks folders, SFTP Servers, FTPS, CIFS File Shares, OneDrive for Business, SharePoint Online, Box, Dropbox, and others.

In total, Kiteworks secure managed file transfer provides complete visibility, compliance, and control over IP, PII, PHI, and other sensitive content, utilizing state-of-the-art encryption, built-in audit trails, compliance reporting, and role-based policies.

To learn more about Kiteworks’ secure managed file transfer capabilities, schedule a custom demo today.

Additional Resources