Do You Need an IT Server for Your Business?
Do You Need an IT Server for Your Small Business?
If your business needs to share large files, has limited internet connectivity, uses Line of Business Applications for specific purposes (eg, accounting software) you may well need a server. A server gives you a central place to store your data, various programs and apps you rely on to conduct business. Choosing the best server setup for you depends on your line of business, your daily operational needs and your internet connection.
Advances in technologies and subscription services has forever changed how businesses utilise servers, especially small business. Exciting opportunities are now available for your small business that were previously only available to enterprise-level organisations. Having a single server solution to run your business operations is fast becoming obsolete. Most businesses, regardless of their size, now operate a hybrid mix of on-premises and cloud-based server platforms to store and access their files, send emails and conduct business.
IT setups can be loosely grouped into three categories with many organisations using a hybrid of all three:
- on-premises (physical) servers;
- cloud-based Infrastructure as a Service (IaaS); and
- cloud-based Software as a Service (Saas).
When an IT engineer talks to you about IaaS, SaaS or servers, they are essentially talking about ways for your business to share and store files, send emails and use Line of Business Apps. So, which server setup is the best solution for your small business to maximise opportunities and cyber security?
The Best Server Setup for Your Business
Understanding how different server setups are utilised, and the different scenarios they are best suited to, gives you the insight you need to make an informed choice. Understanding the pros and cons around performance and cost will help you understand why a hybrid setup of on-premises and cloud-based servers is often the most well-rounded, secure solution for your business. It can also help you streamline and reduce your server operating costs.
1. On-Premises Server
An on-premises, business-grade server gives you the advantage of high-performance speed. They are perfect to use for onsite file storage and sharing – especially for large files, and/or as an Application Server for your database requirements. For example, if you use an on-premises Line of Business App that isn’t cloud enabled (eg, bookkeeping), you need an on-premises server.
Note: One business activity you don’t need an on-premises server for is your email. There’s no good reason, financially or technically, for an SME to setup and maintain their own email server. More on that later.
When you have your own onsite server, everyone working in your office gets instant access to files and Line of Business Apps via cable. With an on-premises server you won’t suffer poor internet connectivity problems when working on files. However, herein lies the potential weakness to on-premises servers. What if you can’t access your office?
If you have fast business-grade internet connectivity, you and your team will barely notice the difference working remotely. However, trying to work with files remotely over a consumer-grade connection or slow internet is incredibly frustrating. You will quickly discover how much time can be lost from just opening, saving and closing files remotely!
I know of a Melbourne accounting firm that was patiently waiting on NBN to be installed in their area, happy in the interim to stick with their basic speed, business-grade internet connection. Then lockdown restrictions were enforced and everyone was sent to work from home. The unforeseen upsurge in online traffic has killed their average connection speeds and their accountants are now working late nights and early mornings to try and work around the problem. If you choose to have an onsite server it’s good to factor in the cost of fast internet to ensure you can always, quickly access and work on your data and apps.
Pro: High speed onsite file and app access. Great for hosting Line of Business Apps that are not cloud-enabled. Payback for on-premises servers is two years, making them the cheapest option over a five-year period, the standard lifecycle of a server device.
Con: Upfront set up costs and capital outlay, and remotely accessing your on-premises server doesn’t work well with slow internet.
2. IaaS (Infrastructure as a Service)
IaaS gives you instant access to computing infrastructure (servers) that is provisioned and managed over the internet. IaaS allows you to transfer your file storage and database requirements from a physical server in your office to the cloud. You pay a monthly fee to remotely use someone else’s computing infrastructure, and your IaaS provider allows you to keep control over how your applications and services are setup and managed.
Instead of your business paying up front for hardware (infrastructure), your IaaS provider charges a fee for maintaining physical servers at their end for you to utilise. However, it’s important you realise that you still retain responsibility to manage the software you use at your end. For example, if your business uses Microsoft Windows and it crashes it’s your responsibility to fix the problem, not your IaaS provider.
Microsoft’s Azure is a good example of IaaS. It’s designed to be your cloud-based storage network. Small businesses with complex storage requirements and fast internet will love Azure. Azure also brings premium, encrypted-level security to your data storage.
However, Azure is not ideal for every business.
If you have simple storage requirements, IaaS may be a server option you don’t need to pay for. For example, if you have straight forward data storage needs and you already subscribe to Microsoft 365, then SharePoint Online, which is included with Microsoft 365, will work perfectly for you. Paying for Azure on top of your Microsoft 365 subscription may be an unnecessary expense for your business.
Another factor to consider before choosing IaaS over setting up your own on-premises server is the speed and quality of your internet connection. For example, if you are an engineering or graphic design business and your team routinely accesses large data files, working remotely on your files over a consumer-grade or slow internet connection will lead to frustration and reduced productivity.
Pro: A global cloud server solution with big business capabilities. It’s perfect if your business has fluctuating licensing needs or specialised infrastructure, app or data management and security requirements but not the capital to set up your own on-premises servers.
Con: This option is too expensive if you only have basic data storage requirements, and it only works well with fast business-grade internet. Over a five-year period, subscribing to an IaaS is more expensive that paying up front for your own on-premises server.
3. SaaS (Software as a Service)
SaaS enables your small business to connect to and use cloud-based software and apps over the internet. Common SaaS examples include email, calendar and office tools, such as Microsoft (Office) 365.
SaaS gives your business a complete software solution on a ‘pay-as-you-go’ basis from a cloud service provider. You rent the use of an app for your SaaS provider and your users connect to it over the Internet, usually with a web browser or an app. Your SaaS provider manages the hardware and software and, with the appropriate service agreement, ensures the availability and the security of the app and your data. (https://azure.microsoft.com/en-au/overview/what-is-saas/)
For example, when you subscribe to Microsoft 365 you can get the full Office suite of apps – Outlook, Email Exchange, Word, Excel, PowerPoint and Teams. As such, it’s the perfect product for new start-ups, Firms and SMEs because it reduces your upfront software costs and gives you enormous flexibility to operate your team from any location with internet.
A Microsoft 365 subscription can give you everything you need for emailing and scheduling, creating work documents, spreadsheets and presentations and keeping in touch with your team, vendors, marketplace and stakeholders through chats, calls or meetings is covered. It gives your team a consistent desktop environment to work with that is incredibly powerful to use because of the connectivity Microsoft have engineered across their apps.
Pro: SaaS such as Microsoft 365 allows your business to quickly and easily access apps with minimal upfront cost. Your team can work from anywhere with internet capability using a cloud-enabled device, giving your business the flexibility and functionality needed to stay competitive through changing circumstances. And you get the security of knowing your provider is responsible for ensuring availability and continuity of their services.
Con: Whilst the upfront costs of subscribing are minimal, over time SaaS becomes the more expensive software licensing option for your small business^.
Should You Have Your Own Email Server?
I previously mentioned there’s no good reason, financially or technically, for an SME to setup and maintain their own email server. Why isn’t it a good idea for you to have your own on-premises email server? It all comes down to the cost of setting up and protecting the availability and continuity of your email service.
When you subscribe to Microsoft 365, which includes Email Exchange, Microsoft ensures a level of uptime for your email services that you are unlikely to be able to replicate on your own! The Microsoft 365 platform has multiple redundancies built into it to protect your ability to access your email, such as multiple servers located across multiple locations, wherever you have internet access. The level of technical expertise and redundancies required to emulate what Microsoft 365 offers you is not financially feasible for small businesses. The set-up costs and logistics of replicating these redundancy levels makes it impossible for a small business to come anywhere close to matching the availability and continuity of services you can get from Email Exchange.
Note: Whilst Microsoft is committed to ensuring the availability and continuity of its services, they do not guarantee email will never go down, as technical problems, even cyber-attacks, can happen to any organisation. However, unless Microsoft is having issues you will be able to access your email at any time, from any location with internet connectivity.
Pro: For small business, there isn’t one! Save your money and subscribe to Microsoft 365!
Con: The enormous commitment and cost to pay upfront for the technical expertise and necessary redundancies needed to build a protected, continuous email service.
^Comparative Set Up Costs between On-Premises and Cloud-based Servers
The normal lifecycle of a business-grade on-premises server is five (5) years. Payback on set up costs for your own on-premises server usually comes in around two (2) years. Which means the following three (3) years cost you nothing. Sometimes a server lasts longer than five (5) years, however it’s safe accounting practice to assume you will get five (5) years from a new business-grade server before it needs to be replaced. Assuming the same level of maintenance between your on-premises server and cloud options, IaaS and SaaS services will cost you more in a five-year period than if you paid to have your own on-premises server.
The cost model for IaaS and SaaS mitigates or transfers the upfront cost of buying infrastructure and software licensing to ongoing, set monthly fees. Subscribing to IaaS or SaaS options is designed to give your business relief from onerous upfront set up costs.
IaaS relieves your business from the costs of maintaining physical infrastructure, although you are still responsible for maintaining the software you use. SaaS transfers all costs of setting up infrastructure and maintaining app software from your business to your provider. However, both options come at a price. As you will never own the infrastructure or services you subscribe to, you will need to continue paying the monthly subscription fee indefinitely.
Choosing the Right Server Set Up for Your Small Business
Hopefully, this article as given you an insight into how different server setups are utilised, and the different scenarios they are best suited to, to help you make an informed choice of the solution that best suits your small business or Firm.
Perhaps the biggest risk to your small business in taking on a hybrid server solution is unwittingly paying for duplication in services or paying for a premium service beyond your needs. Another potential risk you need to manage is ensuring any service your business subscribes to has appropriate, proactive data and cyber security procedures in place, and that you clearly understand what aspects of maintenance and security are not covered by your subscription contract.
If you’re unsure of the server solution you currently use or would like more advice on how to get the best set up for your needs and budget, please call itro now on 1800 10 3000 and ask to speak to one of our specialists. Alternatively, email [email protected] and we will be happy to help.
Caution: All server options discussed in this article are based on using business-grade software, hardware and applications. Devices are advertised by their manufacturers as business-grade or consumer grade for a reason. Consumer-grade devices give you less durability, computing power and warranty than business-grade devices. Consumer-grade internet connections are aimed at meeting the needs of students and home users, not businesses.