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Cloud-based Secure File Transfer: A Head-to-Head Comparison With On-premises File Transfer

by Robert Dougherty updated April 11, 2023 Secure File Transfer

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Secure file transfer is an essential component of business operations. Previously, on-premises solutions were the only option for file transfer. These solutions were often complex, requiring dedicated hardware and maintenance personnel to manage them. Cloud-based secure file transfer has emerged as an alternative to on-premises solutions, promising greater flexibility, scalability, and cost savings. In this blog post, we will explore the pros and cons of both approaches to help you decide which is right for your business.

Table of Contents

Definition of Cloud-based Secure File Transfer

Cloud-based secure file transfer transfers files securely over the internet using a third-party cloud service provider. This file transfer type is generally managed through a web-based user interface, allowing users to upload and download files efficiently and securely. Cloud-based secure file transfer solutions offer greater scalability, cost savings, and ease of use than on-premises solutions.

How Does On-premises File Transfer Work?

On-premises file transfer solutions generally offer greater control and customization than cloud-based solutions but can be less flexible and more expensive in the long run. On-premises file transfer solutions typically involve using dedicated hardware and software. These managed file transfer solutions require a significant upfront investment in hardware, software, and personnel to manage and maintain the system.

Advantages of Cloud-based Secure File Transfer

Cloud-based secure file transfer solutions have become increasingly popular due to their numerous advantages. These solutions enable businesses to securely transfer large files and data across different locations and devices, providing greater flexibility and accessibility. With the rise of remote work and distributed teams, cloud-based secure file transfer has become essential for many businesses. Let’s explore the many advantages below.

1. Scalability and Flexibility

Cloud-based secure file transfer allows businesses to scale their file transfer activities quickly and easily. With cloud-based solutions, businesses can efficiently add or remove users, adjust storage capacity, and make modifications to meet changing needs. For example, a business that experiences a sudden spike in demand for file transfers can quickly and easily add more storage capacity or bandwidth to accommodate the increased traffic.

2. Accessibility

One of the critical advantages of cloud-based secure file transfer is the ability to access and transfer files from anywhere at any time. This allows remote workers, including employees working from home, to easily access and transfer files without a VPN connection. Cloud-based file transfer solutions also offer extensive collaboration features, allowing multiple users to access and work on files simultaneously.

3. Cost-effectiveness

Cloud-based secure file transfer solutions eliminate the need for expensive hardware and software, reducing the cost of maintaining and upgrading traditional on-premises file transfer solutions. Additionally, cloud-based solutions often operate on a subscription-based model, allowing businesses to only pay for the storage and services they need.

4. Security

Cloud-based secure file transfer solutions often have advanced security features like encryption and multi-factor authentication. These features provide an added layer of protection and help protect sensitive data from unauthorized access. Additionally, cloud-based solutions offer data backup and disaster recovery options, ensuring that important files are always accessible and secure.

5. Integration

Cloud-based secure file transfer solutions often integrate with other cloud-based tools like enterprise content management (ECM), collaboration, and project management software solutions. This allows businesses to streamline workflows and improve efficiency by centralizing their tools and processes. For example, a company could use a cloud-based secure file transfer solution that integrates with a project management tool, allowing employees to easily share and access files within the context of a specific project.

Disadvantages of Cloud-based Secure File Transfer

While cloud-based secure file transfer has many advantages, it also comes with potential drawbacks of which businesses should be aware. Here are some of the disadvantages of cloud-based secure file transfer:

1. Dependence on Internet Connectivity

Cloud-based secure file transfer requires a stable and reliable internet connection. Transferring files can become difficult or even impossible during poor connectivity or outages. Additionally, businesses must ensure that their network infrastructure can support the increased traffic that cloud-based solutions require.

2. Data Security Concerns

While cloud-based secure file transfer solutions often come with advanced security features, some businesses may have concerns about their data security in a third-party cloud environment. Companies must carefully evaluate potential cloud-based solutions’ security protocols and certifications and ensure their data is protected from unauthorized access or data breaches.

3. Limited Customization

Cloud-based secure file transfer solutions often have standard features and limited customization options. This may not meet the specific needs of some businesses, which may require more tailored solutions that can be achieved with on-premises file transfer solutions.

4. Data Ownership and Control

With cloud-based secure file transfer, businesses must trust their data to a third-party provider and may have limited control over its management and storage. Companies must ensure their cloud-based solution provider has transparent data ownership, management, and transfer policies.

5. Cost

While cloud-based secure file transfer can be cost-effective in terms of reducing hardware and software expenses, it can also become expensive over time as businesses pay subscription fees and add-ons. Additionally, companies may incur hidden costs such as bandwidth overages or data retrieval fees.

Advantages of On-premises File Transfer

On-premises file transfer is a traditional method of moving files from one location to another, typically within a local area network (LAN) or wide area network (WAN). While cloud-based file transfer has become increasingly popular in recent years, on-premises file transfer still holds several advantages that make it a viable option for businesses. This section will explore the benefits of on-premises file transfer in more detail.

1. Greater Control Over Security and Compliance

One of the main advantages of on-premises file transfer solutions is that they give organizations greater control over their data security. By hosting the solution and files on their servers, organizations can implement and enforce their own security policies, ensuring their files are protected according to their needs. In addition, on-premises solutions can be designed to comply with specific regulatory requirements, such as the Health Insurance Portability and Accountability Act (HIPAA) and the General Data Protection Regulation (GDPR), which may take more work to achieve with cloud-based solutions. For example, a healthcare organization that deals with sensitive patient data may opt for an on-premises file transfer solution to ensure they have complete control over the security of their data and comply with HIPAA regulations.

2. Faster Transfer Speeds

Another advantage of on-premises file transfer solutions is faster transfer speeds. Because the solution and files are hosted on the organization’s servers, file transfers can occur over the internal network, which typically has faster speeds than transferring files over the internet. This can be especially important for organizations that need to share large files quickly, routinely, or in a timely manner. For example, a media company that frequently transfers large video files may prefer an on-premises solution to ensure that transfers are completed quickly and without interruption.

3. Customizable and Scalable

On-premises file transfer solutions can be more customizable and scalable than cloud-based solutions. Organizations can tailor the solution to their needs and integrate it with existing systems. Additionally, as the organization grows and its needs change, the solution can be easily scaled up to accommodate more users or increased file transfer volumes. For instance, a financial institution may choose an on-premises file transfer solution that can be integrated with their existing banking systems and scaled up as the institution grows and the volume of file transfers increases.

4. Lower Long-term Costs

While cloud-based solutions may have lower upfront costs, on-premises solutions can be more cost-effective over the long term. Once the solution is implemented, ongoing costs are typically lower than cloud-based solutions, which may charge based on usage, including overage, or require ongoing subscription fees. In addition, with an on-premises solution, organizations don’t have to worry about unexpected price hikes or changes to subscription plans.

Disadvantages of On-premises File Transfer

While on-premises file transfer offers many benefits, there are also several drawbacks of which businesses should be aware. One of the main disadvantages is the limited accessibility of files. Since on-premises file transfer relies on physical servers, it can be difficult for remote workers or employees working from home to access important files. Even with a VPN solution or connection, file access can be more complicated or time-consuming than with cloud-based file transfer solutions. Another potential drawback is the high cost of maintenance and upgrades required for the hardware and software involved in on-premises file transfer. In the following section, we will explore the weaknesses of on-premises file transfer in more detail.

1. Higher Upfront Costs

One of the main disadvantages of on-premises file transfer solutions is the higher upfront costs. Organizations must purchase and maintain their hardware, software, and infrastructure, which can be expensive. In addition, a business may face additional charges for implementing and configuring the solution, ongoing maintenance, and support. This should be an important consideration for small businesses with limited IT resources.

2. Limited Accessibility

On-premises file transfer solutions may also have limited accessibility compared to cloud-based solutions. Because the solution and perhaps the files are hosted on the organization’s servers, users may only be able to access the solution on-site or when connected to the organization’s internal network. This can be problematic for organizations with an extensive remote workforce or those that need to frequently transfer files with external partners.

3. Lack of Redundancy and Disaster Recovery

If the organization’s servers or infrastructure fail, file transfers may be interrupted or lost entirely. Organizations therefore need to have a robust backup and disaster recovery plan to ensure they can recover quickly from any interruptions or data loss. On-premises file transfer solutions may also need more redundancy and disaster recovery capabilities. A financial services company for example may opt for a cloud-based file transfer solution with redundant servers and disaster recovery capabilities to ensure that file transfers can continue uninterrupted in the event of a failure.

4. Maintenance and Upgrades

On-premises file transfer solutions require ongoing maintenance and upgrades to remain secure and up to date. Organizations therefore need the resources and expertise to manage and maintain the solution, which can be time-consuming and costly. This may be less of an issue for a large enterprise with a dedicated IT team to manage and maintain its on-premises file transfer solution. At the same time, a smaller organization may need help keeping up with the necessary maintenance and upgrades.

Security Concerns With Cloud-based Secure File Transfer

One of the biggest concerns with cloud-based secure file transfer is security. While cloud-based solutions are designed with safety in mind and often offer encryption in transit, multi-factor authentication, and other security features, the solutions are still vulnerable to security breaches and cyberattacks. The fact that the solution and files are stored on servers controlled by a third-party service provider can also raise concerns about data ownership and control. As a result, it is essential to carefully evaluate the security features of any cloud-based solution before implementing it.

Choosing the Right Solution for Your Business

Choosing between cloud-based and on-premises file transfer solutions depends on your specific needs and requirements. Cloud-based solutions may be more cost-effective and scalable for businesses that need to transfer large amounts of data quickly and easily. On-premises solutions may be necessary for businesses requiring greater data customization and control. It is essential to carefully evaluate the pros and cons of each solution and consider factors such as scalability, cost, reliability, and security before making a decision.

Kiteworks Secure File Transfer: The Best of Both Worlds

Kiteworks provides enterprise businesses with two robust and secure file transfer capabilities: Kiteworks Managed File Transfer (MFT) and Kiteworks SFTP. Customers choose a deployment option that best fits their needs: on-premises, hosted, and private, hybrid, or FedRAMP cloud.

Kiteworks MFT is engineered for simplicity, security, and governance. It provides organizations with a scalable and reliable solution that lets you configure your policies and trading partner workflows. Organizations and their employees can access files wherever they’re stored, in folders, file shares, repositories, and cloud stores, and transfers those files automatically or manually. File transfer partners are onboarded simply and quickly. Lastly, administrators can manage, monitor, and recover transfers with an intuitive, graphical operations dashboard. Whether organizations choose the virtual appliance cluster or hosted service, Kiteworks MFT features a hardened virtual appliance vault and built-in defense in depth. Administrators and SOC analysts can see, track, and record every file transfer to demonstrate compliance with regulators and auditors.

Kiteworks SFTP provides enterprise organizations a compliant file transfer mechanism with MFT functionality on dedicated cloud servers for extra security. Kiteworks hardened SFTP servers protect the sensitive files organizations transfer with strong encryption and integrations with single sign-on (SSO), multi-factor authentication (MFA), advanced threat protection (ATP), data loss prevention (DLP), and security information and event management (SIEM) solutions. Administrators apply granular policy controls for internal users and role-based permissions for external users to protect the sensitive files from unauthorized access. Organizations also get complete visibility into their file transfers, including file access, user access, and file movement, supported by advanced analytics and audits.

Kiteworks MFT and SFTP users tap into the Kiteworks Private Content Network to access additional advanced file sharing capabilities such as secure virtual data rooms, collaboration, email, and more.

Finally, Kiteworks helps organizations transfer sensitive files in compliance with numerous data privacy regulations and standards, including GDPR, Cybersecurity Maturity Model Certification (CMMC), International Traffic in Arms Regulations (ITAR), Information Security Registered Assessors Program (IRAP), UK Cyber Essentials Plus, HIPAA, and many more.

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

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