Cloud Backup vs. Local Backup: Which Is Better for Your Business? — Knowledgebase

The short answer

Most businesses should use both cloud backup and local backup. Local backup is fast for restores. Cloud backup protects you if the office, device, or local backup drive is lost, stolen, damaged, or encrypted by ransomware.

Local backup

Local backup stores data on a drive, NAS, or local server.

Advantages:

Fast restore speed
No internet dependency for recovery
Good for large file sets
Can be cost-effective

Limitations:

Can be stolen or damaged with the original device
Can be encrypted by ransomware if always connected
Often not monitored
Easy to forget or overwrite

Cloud backup

Cloud backup stores data in an external data centre.

Advantages:

Off-site protection
Useful after theft, fire, flood, or ransomware
Easier to monitor centrally
Can support version history

Limitations:

Restore speed depends on internet
Ongoing subscription cost
Needs correct retention and security settings
Large first backups can take time

The 3-2-1 rule

A practical backup strategy follows the 3-2-1 rule:

3 copies of important data
2 different storage types
1 copy off-site

For example: the live data, a local backup, and a cloud backup.

What businesses often miss

Many businesses only back up some data. Check whether these are covered:

Accounting files
Microsoft 365 mail and OneDrive/SharePoint
Website files and databases
Customer documents
Line-of-business applications
Server configuration
Password manager recovery

Test restores

A backup is not proven until you restore from it. Schedule restore tests so you know what can be recovered and how long it takes.

Bottom line

Use local backup for fast recovery and cloud backup for disaster protection. The best backup plan is monitored, encrypted, tested, and documented.