Cloud vs. On-premise Managed File Transfer: Which Deployment is Best?
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 .
What Is Managed File Transfer (MFT)?
Managed File Transfer (MFT) is a centralized platform designed to securely and efficiently manage the exchange of data between systems, people, and partners. Unlike traditional FTP or simple ad-hoc file sharing services, MFT provides a robust framework for secure automation, comprehensive governance, and strict compliance with data regulations. It achieves this through centralized control over all file transfer activities, offering detailed audit trails, end-to-end encryption, and policy-based controls to ensure sensitive data is always protected. Platforms like the Kiteworks Private Content Network provide a unified MFT solution that consolidates various communication channels to enforce security and governance across the entire organization.
How Managed File Transfer Works
- Authentication: Users and systems are securely authenticated through various methods (e.g., passwords, multi-factor authentication, SSH keys) before any access is granted.
- Policy Enforcement: The MFT solution applies predefined security and governance policies to the transfer, dictating who can send what, where, and when.
- Encryption: Data is encrypted both in transit (while moving across the network) and at rest (while stored on servers), protecting it from unauthorized access at every stage.
- Automation and Reporting: An automation engine handles the transfer according to scheduled or triggered workflows. Throughout the process, the system generates detailed logs and reports for auditing, compliance, and operational insight.
- SaaS MFT: A fully cloud-native, subscription-based solution where the vendor manages all infrastructure, maintenance, and updates. This is the most common model for a managed file transfer cloud service, offering rapid deployment and scalability.
- Hosted MFT (IaaS/PaaS): In this model, an MFT software instance is deployed on a public cloud infrastructure (like AWS, Azure, or Google Cloud). It offers more control than SaaS but requires more IT management. This is often referred to as a hosted managed file transfer solution.
- Hybrid Cloud MFT: This combines on-premise and cloud deployments, allowing organizations to keep sensitive data on-site while leveraging the cloud’s scalability for other workflows. For example, a company might process sensitive financial data on-premise but use a cloud MFT service for collaborating on marketing materials with external agencies.
- Use Case – B2B Data Exchange: A manufacturing company uses a cloud managed file transfer solution to automate the exchange of purchase orders, invoices, and shipping notices with hundreds of suppliers, ensuring a secure and auditable supply chain.
- Use Case – Regulated Industry Compliance: A healthcare provider utilizes a FedRAMP-authorized cloud based managed file transfer platform to securely share patient records (PHI) with insurance companies and partner clinics, ensuring HIPAA compliance.
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Unified MFT platforms streamline this entire workflow by consolidating these steps into a single, centrally managed system. This eliminates the need for disparate tools, reduces complexity, and provides a holistic view of all data movement, which significantly enhances security and operational efficiency.
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.
MFT Cloud Services and Use Cases
Comparing Managed File Transfer Solutions
When comparing MFT solutions, it’s crucial to look beyond basic file transfer capabilities. An effective evaluation framework should assess several key areas. Feature breadth covers automation, reporting, and integration options. Deployment flexibility is vital—can the solution operate on-premise, in a private or public cloud, or in a hybrid model to match your IT strategy? Security certifications, such as FIPS 140-2 and FedRAMP, provide third-party validation of a platform’s security posture. Finally, consider scalability to ensure the solution can grow with your data volumes and analyze the total cost of ownership (TCO), which includes not just subscription fees but also implementation, training, and maintenance. The best choice will always be the solution that most closely aligns with your organization’s specific security, compliance, and operational priorities.
Competitive Advantages of True Cloud-Based File Transfer
Not all cloud based managed file transfer solutions are created equal. A true cloud-native platform offers significant advantages over legacy on-premise software that has been merely “lifted and shifted” to a cloud server. Modern cloud MFT provides superior performance through elastic scaling, automatically adjusting resources to handle fluctuating workloads without manual intervention. From a security and compliance perspective, these platforms are often built on zero-trust architectures, where every user and device is continuously verified. For example, the Kiteworks platform leverages a hardened virtual appliance for its architecture, which isolates data and metadata to drastically reduce the attack surface, a critical differentiator from multi-tenant solutions that can expose organizations to greater risk.
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.
Cloud vs. On-premise MFT FAQs
MFT implementation timelines vary based on complexity, from a few days for a standard cloud setup to several weeks for a complex on-premise integration with multiple systems. A phased approach is often recommended.
MFT solutions provide the necessary technical controls for regulatory compliance, including end-to-end encryption, granular access policies, and immutable audit logs. These features help organizations prove that sensitive data is protected according to regulatory standards.
A modern cloud MFT can be just as, if not more, secure than an on-premise deployment, provided it is built on a security-first architecture. Look for vendors with a hardened virtual appliance, zero trust security principles, and key regulatory compliance certifications. For example, the Kiteworks secure MFT solution is designed to meet these stringent security and compliance requirements across all its deployment options.
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