Cloud adoption is accelerating among Australian small and mid-sized businesses (SMBs), driven by the need for flexibility, scalability, and cost efficiency. However, many SMBs continue to rely on on-premises servers for core workloads, often due to compliance requirements or legacy systems.
Security remains a pivotal concern in this decision-making process. Some perceive cloud environments as inherently riskier, while others view on-premises setups as outdated. The reality is that both models can be secure or vulnerable, depending on their implementation and management.
In 2025, the optimal choice for many SMBs is a hybrid approach, combining the strengths of both cloud and on-premises infrastructures. Gartner predicts that 90% of organizations will adopt a hybrid cloud approach through 2027. This strategy allows businesses to leverage the scalability and advanced features of cloud services while maintaining control over sensitive data and legacy applications on-premises.
Understanding the unique risks and benefits of each model is essential. By carefully assessing their specific needs and resources, SMBs can implement a balanced infrastructure that enhances security, compliance, and operational efficiency.
Cloud infrastructure security- What’s improved in 2025
In 2025, cloud infrastructure is no longer just a modern alternative, it’s a security powerhouse. Providers like Microsoft Azure, AWS and Google Cloud have significantly evolved their native security features, offering more built-in protection than ever before.
According to recent research, more than half of SMBs are running significant workloads on AWS, while Azure and Google Cloud continue to grow across smaller-scale deployments and testing environments.
Source: State of Cloud Report
As usage expands, so does the need for a structured, well-secured cloud environment. Today’s cloud platforms come equipped with:
- Encryption by default, protecting data both at rest and in transit
- Advanced threat detection and automated response that uses AI and behavioural analytics
- Global redundancy and disaster recovery, ensuring resilience and uptime even in critical failures
- Compliance-aligned frameworks that support standards like ISO 27001, SOC 2, and Australia’s Essential 8
For SMBs, these capabilities are game-changing. Instead of building and maintaining expensive in-house security stacks, businesses can now access enterprise-grade protection with predictable, subscription-based pricing.
Put simply, the cloud has matured and it's helping smaller businesses implement robust, scalable security with greater ease and consistency.
On-Prem security control comes with responsibility
While cloud adoption continues to grow, on-premises infrastructure still holds strong appeal for many SMBs. It offers full control over physical systems, direct oversight of network architecture, and the ability to meet strict data residency or compliance requirements. It’s also the go-to for businesses running legacy applications that aren’t cloud-compatible.
But with full control comes full responsibility.
Unlike cloud platforms that come with built-in security and shared accountability, on-prem security is entirely dependent on internal capability. That means asking:
- Are patches and updates applied consistently?
- Is physical access to servers properly secured?
- Has your disaster recovery plan been tested and can it actually restore services quickly?
- Do you have the tools in place to detect and respond to threats in real time?
If the answer to any of these is "not yet" or "we’re not sure," on-prem can become a weak link in your security posture. Without ongoing investment, up-to-date tools and experienced oversight, the risks of maintaining on-prem infrastructure often outweigh the control it provides.
Cloud vs. On-Prem: Key security trade-offs for SMBs
There’s no one-size-fits-all answer to the cloud vs. on-prem debate. Each model comes with its own strengths and limitations especially when it comes to security. Here’s how they compare across five key areas:
|
Consideration |
Cloud |
On-Prem |
|
Security Features |
Enterprise-grade protections built in, following a shared responsibility model |
Full control, but entirely reliant on your internal team’s capabilities |
|
Cost |
Operating expense (Opex) model, scalable with security often bundled |
Capital-heavy upfront investment, with ongoing maintenance and security costs |
|
Control |
Data hosted off-site, managed via granular admin tools |
Full physical access and complete data ownership |
|
Compliance |
Easier alignment with global frameworks like ISO and Essential 8, but local interpretation still matters |
Direct control, but managing compliance is more hands-on and resource-intensive |
|
Flexibility |
Instantly scalable with built-in remote access for hybrid workforces |
Limited by existing hardware and physical location |
Why hybrid models are gaining traction
As SMBs evolve, so do their infrastructure needs and increasingly, the answer isn’t just cloud or on-prem, but both. Hybrid infrastructure models are becoming more popular among businesses looking to balance control, cost and security without compromising performance.
For many, cloud is the natural choice for scalability, collaboration and running modern applications. It enables teams to work from anywhere, access tools on demand, and scale up or down quickly.
At the same time, on-premises systems still have a place. Whether it’s to support legacy applications, meet data residency requirements, or retain tight control over sensitive workloads, many businesses find that keeping some infrastructure local just makes sense.
The real trade-off is between control and convenience and the businesses that get it right are the ones that treat hybrid as a strategy, not a shortcut.
How to choose the right path for your SMB in 2025
With both cloud and on-prem infrastructure offering pros and cons, the right decision for your business depends on more than just technology, it’s about your operational needs, internal capability, and long-term goals.
Here’s how to frame the decision:
- Start with your business needs.
Consider compliance requirements, remote work support, scalability expectations and the skillset of your internal IT team. Each of these factors can influence whether cloud, on-prem or hybrid is the best fit. - Be honest about your security posture.
If you’re leaning towards on-prem, ask: do you have the expertise, processes and resources to manage security effectively in-house? - Look beyond hardware costs.
Total cost of ownership includes software licensing, patching, threat monitoring, backup, and recovery. The model that looks cheaper upfront may demand more to run securely over time. - Think about flexibility.
Your business won’t stand still and neither should your infrastructure. A solution that scales with your growth and supports change will save you time and cost in the long run. - Work with trusted partners.
Cloud and hybrid environments introduce complexity, especially around integration, security and compliance. A well-planned strategy with the right IT partner can make all the difference.
Choosing your infrastructure model isn’t about following trends, it’s about building a foundation that fits your business today and supports where you’re going next.
Building a secure and scalable infrastructure
At The Missing Link, we help small and mid-sized businesses make infrastructure decisions that balance performance, cost, control and most importantly, security. Whether you're modernising legacy systems, migrating to the cloud, or building a hybrid model, our experts work with you to design and secure an environment that fits your business today and supports where you're headed next.
Our team brings deep experience in cloud security, compliance, and infrastructure integration, so you don’t have to figure it all out on your own.
Security is not about where your infrastructure lives. It is how you manage it.
Understand the risks, plan smartly, and build the right mix of cloud and on-prem for your business needs.
Get in touch with The Missing Link to plan the right infrastructure path for your business.
If cloud is part of your strategy, it’s essential to get the security right. Stay tuned for our next blog to learn how to secure your cloud infrastructure after migration.
