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You mentioned the first concern for most entities - the capital expenditure for investment in on-premises infrastructure vs. the cost of a hosted service. Depending on the size (and resources) of your business, your capital fund can be significantly depleted by the expense of new servers. Beyond the up-front cost of purchasing hardware, there will be an investment of time and effort to get everything migrated and running properly. And as we know, sometimes those projects that you have budgeted x amount of time for end up requiring multiples of that by the time you are finished. In other words, aside from financial issues, it is often just easier to chose a hosted service. On the other hand, if everything is on-site, you have control over everything, and if you have the expertise to address problems efficiently, you do not have to rely on someone else to solve issues that might be minor to them but significant to you.