Today most businesses are replacing FTP with SFTP

Published 2026-05-21 06:10:06.96673 by Carsten Blum

I’m writing this post today because we genuinely meet a surprising number of companies that are confused about the difference between FTP and SFTP. The terms are often used interchangeably, sometimes even by vendors, which is understandable considering how similar they sound. But technically and operationally, they are very different protocols — and many businesses are missing out on major security and operational benefits simply because their old FTP workflows have “always worked”.

The goal of this article is not to declare FTP dead, because it absolutely isn’t, but rather to explain why so many companies are now gradually replacing FTP with SFTP in modern infrastructure. I should mention that the use of FTPS - FTP with TLS, is considered safe and secure. The only downside of FTP and FTPS, is that it doesn't offer public/private key encryption like SFTP does. This article is a strict comparison of FTP (without TLS) compared to SSH based SFTP. If you love FTP, and can support FTP with explicit TLS - go ahead.

If you’ve worked in IT long enough, you’ve probably encountered FTP in places that made you think "isn't there a more secure alternative":

• Banking systems

• ERP integrations

• Surveillance infrastructure

• Manufacturing equipment

• Ancient Linux servers humming quietly in a rack somewhere since 2009

And somehow… it still works. That’s the important part. FTP became popular because it solved a very real problem extremely well: Moving files reliably between systems.

The problem is just that the world around FTP changed dramatically.

Today we expect:

• Encryption

• Auditability

• Secure remote access

• Cloud infrastructure

• Simpler operations

  
  

Meanwhile classic FTP still happily transmits usernames and passwords like it’s perfectly normal to live in 1971. Which, to be fair, it once was. This is why many businesses are now gradually replacing FTP with SFTP. Not because FTP suddenly stopped working. But because security, operations and infrastructure expectations changed.

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FTP vs SFTP

One of the biggest misconceptions in IT is that SFTP is simply “secure FTP”. Technically, that’s not true at all. FTP and SFTP are completely different protocols.

FTP

• Originated in 1971

• Uses separate control and data channels

• Was designed before modern encryption existed

• Often struggles with NAT/firewalls

• Is still extremely widely supported

SFTP

• Runs entirely inside SSH

• Uses a single encrypted connection

• Is much easier to secure operationally

• Simplifies firewall configuration

• Is designed for modern infrastructure

Why companies are replacing FTP with SFTP

The short answer: Security and simplicity.

The slightly longer answer: Modern infrastructure became increasingly difficult to operate securely using classic FTP.

1. Secure file transfer is now mandatory

Many industries now require encrypted file transfers by default.

Examples:

• Financial services

• Healthcare

• Manufacturing

• Legal and accounting

• Enterprise B2B integrations

Classic FTP simply does not meet modern security expectations.

SFTP solves this by encrypting:

• Authentication

• Commands

• File transfers

• Metadata

This is why SFTP is often the default requirement in enterprise security policies.

2. SFTP is easier to operate in cloud infrastructure

One of the biggest practical differences is networking.

FTP/FTPS historically uses:

• One control connection

• Separate data channels

This creates operational complexity with:

• Firewalls

• NAT

• Proxies

• Load balancers

SFTP avoids most of this entirely by using:

• One port

• One encrypted SSH tunnel

This makes SFTP significantly easier to deploy in modern cloud infrastructure.

3. Simpler automation and integrations

Modern infrastructure increasingly relies on:

• Automation

• APIs

• Event-driven workflows

• CI/CD systems

SFTP integrates naturally into these workflows. Especially in Linux and cloud-native environments.

This is also one of the reasons we recently launched our dedicated Cloud SFTP platform and content cluster.

4. Easier compliance and auditing

Another major reason companies replace FTP with SFTP is compliance.

SFTP makes it easier to:

• Centralize access control

• Audit user activity

• Restrict permissions

• Enforce encryption policies

This becomes especially important when handling:

• Customer data

• Financial exports

• Internal business documents

• Automated system integrations

5. Better fit for managed cloud infrastructure

Modern SFTP workflows increasingly rely on managed services rather than self-hosted servers.

This reduces:

• Maintenance

• Operational overhead

• Security risks

• Manual scaling

A modern managed SFTP service typically includes:

• Secure storage

• User management

• Managed infrastructure

• Scalable performance

Without requiring teams to maintain SSH infrastructure themselves.

Common FTP → SFTP migration scenarios

ERP integrations

Many companies replace:

ERP → FTP server

With:

ERP → SFTP workflow

To improve:

• Security

• Compliance

• Auditability

Legacy partner integrations

Many older integrations still rely on FTP simply because:

“That’s how it’s always worked.”

But replacing FTP with SFTP often requires surprisingly small workflow changes while significantly improving security.

Cloud migration projects

A very common scenario today is:

• Moving away from on-premise FTP servers

• Replacing them with cloud-hosted SFTP infrastructure

  
  

This is where modern SFTP hosting platforms become useful.

SFTP does not replace every FTP use case

This part is important. FTP still absolutely has valid use cases.

Especially:

• Embedded devices

• Legacy industrial systems

• Extremely old enterprise software

• Internal isolated networks

Which is also why our original Cloud FTP platform still exists and continues growing. In reality, many companies end up supporting both FTP and SFTP simultaneously.

Choosing the right SFTP solution

When evaluating SFTP providers, look for:

• Managed infrastructure

• Secure storage

• Simplicity

• Scalability

• API and automation support

• Transparent operations

If you’re exploring modern SFTP infrastructure:

→ /cloud-sftp/service/

→ /cloud-sftp/storage/

→ /cloud-sftp/server/

Final thoughts

Businesses are not replacing FTP because file transfers disappeared. Quite the opposite. File-based integrations are still everywhere.

What changed is the expectation around:

• Security

• Simplicity

• Cloud infrastructure

• Operational management

SFTP solves many of those modern operational problems while preserving the simplicity that made FTP successful in the first place.

Explore Cloud SFTP to build secure and scalable file transfer workflows.