Cloud vs. On-Premises In The Pharmaceutical Industry: Which Delivers A Lower Total Cost Of Ownership?

By Elizabeth Keefe

The pharmaceutical industry faces escalating expenditures due to the complexity of traditional clinical trials, fragile supply chains, and increasing regulatory pressures, prompting a shift toward cloud solutions. Approximately 83% of pharmaceutical companies now leverage cloud computing to mitigate these challenges, attracted by its scalability and cost-efficiency. Cloud solutions reduce upfront and maintenance costs compared to on-premises infrastructure.

The transition to cloud systems requires balancing capital versus operational expenditures, with cloud infrastructure providing a pay-as-you-go model that lessens the need for substantial capital investments. Despite on-premises systems offering more control, they incur higher long-term costs for security and compliance. Research highlights that cloud-based infrastructure significantly reduces total cost of ownership (TCO) by cutting hidden costs related to physical infrastructure management. This predictable cost model aligns with the pharmaceutical industry's needs for efficient data storage and rapid innovation, as evidenced by the expedited delivery of the Covid-19 vaccine candidate. Companies like Sikich support pharmaceutical firms in cloud migration, helping optimize returns, reduce costs, and enhance scalability through strategic cloud implementation services.