Your Server: Self-Hosting vs. Cloud-Hosting

More and more, the world of Information Technology is moving in the direction of a monthly subscription model for both software and hardware. Increasingly, companies are opting to pay a monthly fee for access to a server outside their office and owned by a third party, rather than investing capital in purchasing a dedicated server outright. That’s not to say that having your server hosted is right for everyone, but it does have several advantages.

Let’s have a look at some of the benefits of a hosted server.

  1. Hardware Failures are never an issue. If you buy your own server and it fails, you’re out of luck until someone shows up to repair it. And if it’s out of warranty, you’ll need to pay someone to come in and fix it. Under the subscription model you simply pay a monthly fee and everything is managed by the hosting company. If they experience a hardware failure, they’ll simply switch you to a different computer. Minimal downtime and no extra costs!
  2. You can access your data from anywhere. You’re no longer reliant on a VPN or other remote access technologies which require relatively high Internet speeds to be useable.
  3. Preserve your capital. Instead of investing thousands of dollars in hardware that will be obsolete in a few months, pay a low monthly fee for access to state-of-the-art equipment.
  4. No need to purchase expensive software. Hosting companies include the operating system software with your subscription, so when Microsoft releases an update you can have it right away. No need to pay for the software or the labour to install it.
  5. You only pay for the time you use. If your organization operates only 8 or 12 hours a day this may be of serious interest to you. Hosting companies will often allow you to buy “a part” of a server. But what this really means is you are only paying to use it during your hours of operation. You need to make sure you shut down the server so you’re not paying for it, but if you only operate for part of the day this could save you a lot of money.
  6. Upgrading is VERY easy. This is a really important point. Often, a business will outgrow the server that they thought was more than adequate just a couple of years earlier. And upgrading can be costly and have an impact on your productivity. By the time you purchase the hardware and get a technician on site, the costs can be scary. By comparison, upgrading a hosted server usually just involves a few mouse clicks and – possibly – a reboot. Your monthly cost will increase, of course, but otherwise the impact on your business is negligible.
  7. Improved network security. Since managing the interests of many businesses can carry a lot of liability, hosting companies are much more motivated to have the proper security in place. Not only do they have sophisticated tools to keep their customers’ servers entirely separate from one another, but they all utilize state-of-the-art firewalls and other security technologies to keep their servers (and your data) safe.

Should I buy a server or host it?

There’s no simple answer to that question. It completely depends on your circumstances. Some simple guidelines say that if you’re a start-up, a very small company, a company that is virtual or whose employees are distributed around the world, a cloud based environment is the way to go.

But when we start digging deeper, the first question that arises is the quality and speed of your Internet connection. If you have a fast connection that rarely goes down you may be a good candidate for external hosting. On the other hand, if your connection is slow or unreliable (or both), a hosted server is probably a bad choice. If you can’t rely on server access it will only impede your business.

It also matters how you use your server. If your company uses your server to simply share small files across the network then cloud hosting is probably a good fit. On the other hand, if you use your server to share large files (especially with employees inside the office) it’s likely to be more effective to purchase your own server. Even if your Internet connection is fast, these files could take a long time to load and impact productivity.

The software applications you use also have a major influence on this decision. For example, if you’re using a traditional Client / Server application like QuickBooks, cloud-hosting is not going to be the right fit. That’s because these applications work in two parts: the “client” runs on your local computer while the “server” runs (of course) on your server. Every time you open an invoice or a customer record, the server has to retrieve the data and send it to the client computer. That takes time and in tests we’ve done over the Internet, most users find it unpleasantly slow.

Finally, if your server is being used by a large number of users simultaneously and your Internet connection isn’t really fast, you should also consider purchasing a server. The load on your connection would likely be too much, resulting in unacceptable delays.

So what do I do?

First and foremost, don’t rush. A well though-out decision that takes a month longer is better than a hasty one. What you decide to do depends on a number of factors including the age of your server, your Internet connection, your preference for capital vs. operating expenses, and your individual needs.

Let’s begin with the age of your server. If your server is relatively new and you’ve already invested in the set up and configuration, there’s no point in wasting money. Continue using it until your warranty ends and then transition to a new server, or a cloud-hosted server.

But after 3 years server warranties end and the server themselves are usually not delivering the level of performance required. So if you have a server that is 3 years or older, it’s time to decide whether to purchase another piece of server hardware, or to have it hosted externally.

This is where a close look at your environment and your needs will help you make the right decision for your business. Often this type of strategic IT investment requires the eye of an experienced, skilled technician. Although many businesses have computer-literate employees, there’s still a world of difference between being an effective user and knowing how to make a strategic IT decision. Understanding and predicting how your server will perform in a specific configuration needs experience and skill.

If you need some advice or would like to discuss your options we’d be happy to help. You can call us at 416-966-3306 or email us at [email protected].