On-Premises Versus Cloud APM: Which is Best for Your Asset Performance Management Program?

I’ve seen an increasing trend in energy companies moving to cloud-based Asset Performance Management (APM) software — and with good reason.
 
Other industries are experiencing huge benefits from making the switch to the cloud: For instance, Healthcare & Life Sciences are using the cloud to support AI-driven diagnostics and drug discovery. Financial Services & Banking are relying on it to improve fraud detection and speed up online transactions for millions of online customers.
 
While these industries are all enjoying cloud-based tools, energy companies must weigh several factors when deciding between on-premises and cloud-based software. Factors like cost, security, scalability, and operational complexity all play a crucial part.
 
So how can energy companies tap into the scalability, efficiency, and innovation offered by cloud-based APM software? First, I’ll break down the 11 areas to consider before exploring whether moving to the cloud could work for you.

On-premises APM solutions often involve higher upfront costs (like hardware and infrastructure) along with ongoing maintenance and specialized IT resources. When using cloud infrastructure, the expense is shifted to the cloud provider as you don’t own the assets outright. This leads to cost savings on server management and licenses and lets you avoid hardware and infrastructure costs. You can also save with higher resource efficiency and allow your IT resources to focus on other priorities (like user support).

If you use on-premises hardware for your APM, the physical nature of your systems will always limit how much you can scale. And if you need to expand capacity, that could mean installing new hardware. Scaling site-by-site also introduces the risk of connectivity challenges. Provisioning new resources can also take longer due to hardware dependencies, making your solution less agile than cloud-based solutions.

On the other hand, scalability with cloud solutions is easy. For many cloud-based APM solutions (like GE Vernova’s APM Essentials), you only need to purchase the software once — whether that’s for two or two hundred sites. With cloud storage, you can scale capacity with ease — with no need for on-premises hardware updates. This rapid resource provisioning, adoption of new technologies, and faster response to business changes can improve your organization’s agility.

It can take longer to deploy on-premises software due to the need for hardware setup and software installation. You also need an in-depth knowledge of your organization’s hardware infrastructure and sometimes need to modernize your other systems that generate data for asset performance management. Cloud-based APM is generally faster to deploy as it eliminates the need for physical installation and configuration, although you may need to address any incompatible hardware.

This ease of deployment also ensures a faster time-to-value compared to on-premises options. Since you don’t need to purchase and install hardware, network, storage, and security, you speed up configuration and can benefit from the software’s insights to reduce maintenance costs and increase availability sooner.

On-premises asset performance management integration is a heavy lift. It often calls for an overall program to modernize your other solutions and update hardware to meet data accessibility needs. When it comes to scaling operations, integration can require another large lift.

But when it comes to cloud-based solutions, integration is usually built in, making it easier to connect with other cloud-based services and applications (with extensive APIs and connectors). Cloud-based APM offers straightforward connectivity for systems like SAP 4Hana, IBM Maximo, OSI-PI, GE Vernova’s Proficy software and other data historians, in addition to enterprise data sources like Datalakes.

On-premises updates must usually be managed manually. This can be resource-intensive and may lead to delays— team members need to be designated to the project, taking them away from other critical work. If updates aren't delivered regularly, you could experience technical debt, performance degradation, and potential security lapses — increasing total cost of ownership.

In contrast, regular, automatic updates help keep cloud-based asset performance management software up to date with the latest features and security patches. Because updates can be managed remotely, you can implement security patches and features in near real-time. This means you’ll know you’re running the latest version of the application software as well as the underlying supporting software.

There are several security benefits to on-premises solutions. You retain greater control over your security measures and data protection, backups, and storage. But this control can also introduce risk if your team isn’t vigilant.
 
In the cloud, your security is generally managed by the service provider. They’re responsible for detecting, preventing, and remediating data loss or theft while providing data protection and backups. With auto-updates, you’ll also be on the latest versions and patches for your applications to proactively reduce threats. Some cloud-based asset performance management solutions, like GE Vernova’s cloud APM, use shared-security models to mitigate risks with certifications like SOC 2.

When using on-premises asset performance management solutions, users can benefit from ultra-low latency and fast data access from within the organization’s network. This reduces your dependency on internet speeds. In the cloud, however, performance could be an issue if the network has a problem. On the other hand, if your workforce is distributed (or has remote employees), cloud-based applications are usually faster.

The reliability and availability of on-premises solutions depend on your organization's infrastructure and disaster recovery planning. When using the cloud, you usually experience high availability and benefit from built-in redundancy and disaster recovery options. With GE Vernova’s cloud APM on Essentials, for example, microservices help increase availability —including the ability to hot/cold store data and return to uptime faster.

If you manage your asset performance management solution on-premises, you retain total control over ensuring compliance with local data regulations — your data is always under your control. When using a cloud-based solution, you’ll need to consider the data implications. Will the solution comply with local regulations? Will it flex to your different sites and data centers? How will you check? Thankfully, these sorts of questions are discussed before deployment.

When your asset performance management solution is based on-premises, your success relies on hiring and retaining skilled IT professionals to manage and scale your infrastructure. Without the right talent and hardware infrastructure, it’s much harder to adopt new technologies (like AI).

By tapping into highly skilled cloud experts through your cloud-based APM provider, you can avoid the challenge of attracting and retaining IT talent and free up your team to focus on higher-value work. And, with a microservices architecture, the cloud lets you gain access to emerging technologies that are being used by the vendor.

Modern energy companies need the ability to run deep analytics into performance. With on-premises APM solutions, you can deploy digital blueprints and your own analytics policies. Unfortunately, it can be hard to scale your analytics capabilities and you may not benefit from real-time insights.
 
In the cloud, you can store and easily access predictive analytics for your equipment. This could combine analytics from your data science team with the 370 digital twin blueprints GE Vernova supports. Cloud-based analytics can also enable you to tap into superior analytics capabilities, including AI and deep learning.

It really depends on the nature and priorities of your organization. Are you looking to improve agility, scalability, and analytical capabilities with the latest tools and features? Do you need to stay in line with specific local regulations and stick to your existing data protection processes?

In general, making the move from on-premises to cloud-based APM can enable organizations like yours to reduce costs while improving capabilities. If you reduce the need for owned infrastructure, physical resources, and manual upgrades, you could move to a more predictable and scalable operational expenditure model.

As AI and machine learning continue to evolve, energy companies using the cloud look to be better positioned to adapt, innovate, and stay competitive in an increasingly digital and data-driven industry.

Migrating to the cloud can feel daunting. But if your organization is thinking about starting that journey and needs some help, feel free to reach out today.