What's Best for My Business - Servers vs Cloud

As technology has evolved, companies struggle to determine whether a new system or product will meet their specific needs. Of these new technologies, one of the most important decisions is whether to use cloud computing or to invest in an in-house server.

Cloud Computing – What exactly is it? While there are many nebulous definitions, cloud computing essentially allows people to use applications and store data on internet-based servers instead of local computers. This system can be a cost effective solution for offices that don’t have a large budget to purchase expensive software licenses, new computer hardware, or PC maintenance and repairs. Cloud computing also requires minimal setup costs and keeps data centalized off-site.

Conversely, cloud computing is a complex technology that, for most businesses, becomes an expensive liability. Primarily, cloud computing is 100% dependent on a high-speed, 24/7, stable internet connection. When there is a problem on the internet, such as network congestion, slow speeds, and service outages, cloud computing hinders productivity and holds company data hostage. And because your data is being sent over the internet and stored on someone else’s servers, private information is at risk for being lost or stolen. Furthermore, if the cloud computing company suddenly goes out of business or experiences catastrophic hardware failure, it is uncertain if the data can be recovered. Migrating to another service provider will incur additional setup expenses and exacerbate the inherent problem of sharing printers and other office peripheral devices. If such risks aren’t worrisome for most businesses, the recurring monthly service fees, the costly internet connection and additional data transfer charges will be more expensive than originally projected.

In-House Servers – These robust devices serve many functions depending on the business’ needs. Some companies use servers only for centralized file storage, while others also use servers for email and application management. Local servers run much faster than cloud-based services and allow employees to continue working even when the internet is down. On an in-house server, the company’s private data is physically secured. Additionally, businesses have full control over how to their server is used, what software is installed, and where the data backups are stored. If a company ever needs more space, local servers are easy and cost effective to upgrade. Companies have the flexibility to reallocate their server’s resources and don’t have to pay high surcharges for bandwidth overages. And once companies invest in these fast, reliable servers, there is no recurring monthly fee.

Certainly, servers must have some disadvantages, right? The only downside of utilizing a server instead of cloud computing is the maintenance cost. Once a company buys a server and licenses its software, the company owns the server and is entitled to the accompanying software support. Of course, the antivirus software must be renewed annually. It’s also recommended that companies have routine server updates and maintenance performed, though companies can delay such service as their budget dictates. Most importantly, though, is that the total cost of ownership for an in-house server is significantly lower over the long term.


  • Cloud Computing
  • In-House Servers