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Journey to the Cloud: Navigating the Transformation - Part 2

Nikko Asset Management's Marcus Rameke on the Advantages of HCI On-Premises
Journey to the Cloud: Navigating the Transformation - Part 2
Marcus, Rameke, head of IT, senior vice president, Nikko Asset Management, New Zealand and CyberEdBoard executive member

Part 1 of this three-part blog series discusses the requirements for a shift to the cloud.

See Also: 5 Requirements for Modern DLP

In Part 2, we will delve into the reasons behind the preference for HCI over traditional three-tier architecture data centers and IaaS and why the vision to move the workload to SaaS or PaaS is preferable.

First, let's explain what public, on-premises, private and hybrid cloud are:

  • Public cloud: Third-party providers provide cloud services over the internet in a public cloud model. These services are accessible to multiple organizations or individuals, and resources are shared among various users.
  • On-premises - private cloud: On-premises cloud refers to a cloud infrastructure built and managed within an organization's data center. It offers more control over data and security but requires significant upfront investment and ongoing maintenance.
  • Managed private cloud: A private cloud is similar to an on-premises cloud but is operated and maintained by a third-party cloud service provider exclusively for a single organization. It offers increased control and customization while leveraging some cloud benefits.
  • Hybrid cloud: A hybrid cloud combines two or more cloud deployment models - public, private or on-premises - that remain distinct entities but are connected through technology, allowing data and applications to be shared between them.

    A hybrid, multi-cloud approach combines cloud services and providers - public, private or on-premises - to meet specific business needs. This strategy aims to leverage each cloud model's strengths while mitigating its weaknesses. It provides organizations greater flexibility, scalability, redundancy, and the ability to avoid vendor lock-in.

Advantages of HCI On-Premises Over Traditional 3-Tier Architecture Data Center and IaaS

Hyper-converged infrastructure, or HCI, is preferable and offers several advantages over traditional three-tier architecture data centers due to its simplified management, performance, reliance, scalability and cost-effectiveness. HCI integrates computing, storage and networking into a single platform, reducing complexity and operational overhead. It offers seamless scalability by adding modular nodes, allowing organizations to adapt to changing demands while minimizing hardware costs quickly.

While HCI offers numerous benefits, organizations must assess their specific needs, workloads and budget before adopting this infrastructure model. Each approach has its strengths and weaknesses, and the right choice depends on the unique requirements and goals of the organization.

Moreover, while Infrastructure as a Service, or IaaS, in the cloud offers numerous benefits, some organizations prefer to adopt HCI solutions on-premises. We will explore the advantages of HCI over IaaS for businesses seeking localized control, improved performance and enhanced security.

Localized Control

One of the primary advantages of deploying HCI on-premises is the ability to retain localized control over the infrastructure. Unlike IaaS, which relies on third-party cloud providers to manage data centers and hardware, on-premises HCI allows businesses full ownership and management of their infrastructure. This level of control enables IT teams to tailor the infrastructure to meet specific requirements, optimize workloads and quickly address any issues that may arise.

With localized control, businesses can ensure compliance with industry regulations and internal security policies. It allows customizing security measures according to individual needs, reducing the risk of unauthorized access to sensitive data. For organizations operating in heavily regulated industries such as finance or healthcare, on-premises HCI becomes a compelling choice until a straightforward approach to the cloud has been established.


Performance is critical to any IT infrastructure, and on-premises HCI shines compared to IaaS. Having all resources localized within the organization's data center minimizes data movement between different services, leading to reduced latency and improved application response times. This enhanced performance results in better user experiences, increased productivity and reduced downtime.

On-premises HCI also offers predictable performance, as businesses clearly understand the underlying hardware and can scale resources accordingly. IaaS, on the other hand, may suffer from shared resources in multi-tenant environments, leading to potential performance variations during peak times.


Latency is crucial, especially for applications that demand real-time processing or require instantaneous responses. With on-premises HCI, businesses can minimize latency as data communication occurs within the confines of the local network. IaaS, while convenient, introduces a level of latency inherent in the data transfer between the organization's data center and the cloud provider's servers. Despite high-speed internet connections, external factors can affect the speed and reliability of data transmission, making on-premises HCI the preferred choice for low-latency applications.

Not having big cloud providers' data centers in New Zealand yet can have several negative impacts and lead to latency issues when adapting to the cloud. The physical distance between New Zealand and the nearest data centers of major cloud providers can lead to higher latency. When data needs to travel long distances, it introduces delays in data transmission, leading to slower application response times. This latency can significantly impact user experiences and hinder the seamless operation of real-time applications, such as video conferencing, online gaming and other interactive services.

The higher latency and dependency on international connectivity may necessitate more significant network optimization and infrastructure investments in New Zealand. These additional costs can be burdensome for businesses, tiny and medium-sized enterprises, which may find it challenging to compete on a global scale without the cost efficiencies provided by local cloud data centers.


For some businesses, the cost of running applications in the cloud can quickly add up, especially when workloads require high-performance computing or significant storage capacity. On-premises HCI offers cost efficiency by eliminating the recurring expenses associated with IaaS subscriptions and usage-based billing.

While the initial capital investment for deploying HCI may be higher, the long-term operational expenses are relatively lower, especially when considering depreciation and ROI over time. Also, businesses can repurpose existing infrastructure or gradually upgrade hardware, reducing costs.


Data sovereignty is crucial, particularly for businesses operating in countries with strict data regulations. Storing sensitive data within the organization's premises ensures compliance with local data protection laws and safeguards against potential legal complications arising from cross-border data transfers, as might be the case with IaaS.

In conclusion, hyper-converged infrastructure on-premises offers numerous advantages over traditional three-tier architecture data centers and Infrastructure as a Service for businesses seeking localized control, improved performance and enhanced security. While IaaS remains a viable option for some use cases, embracing the power of localized control and performance through HCI represents a forward-looking approach to data center management.

Part 3 will discuss why cloud solutions such as SaaS and PaaS are preferred over on-premises HCI forachieving environmental sustainability.

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Rameke is an evangelist for learning and an activist for change in the information technology sector. He manages all aspects of IT for Nikko Asset Mangement New Zealand. Rameke is recognized as one of New Zealand's Top 50 Technology Leaders, and he was awarded the prestigious CIO 50 award for two consecutive years in 2022 and 2021 by CIO New Zealand. In 2019, he was selected as one of the top 150 IT leaders in New Zealand by the CIO Leaders' Summit.

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