Cloud Server or Physical Server? A Decision Guide for Businesses

Topic: Cloud Servers & VMs Level: Beginner 3 min read By the ITPlus724 team

When your company’s server reaches the end of its life or you need a new service, the first question is: should you buy a new server, or run the service on a cloud server (a virtual machine in a data center)? The answer is not the same for everyone; it depends on the type of service, your users and your budget.

A Physical Server in the Office

Advantages:

  • Full control over hardware and data on the company’s own premises.
  • For services that move large amounts of data across the internal network, such as a file server with large files, local access is fast.
  • Less dependence on the internet for users inside the office.

Challenges:

  • High upfront cost and hardware depreciation.
  • A need for a server room, UPS, cooling and maintenance.
  • A hardware failure means downtime until the part arrives, unless you have redundancy.
  • Risk of fire, power outages and theft at the office.

A Cloud Server (a Virtual Machine in a Data Center)

Advantages:

  • No hardware purchase cost; recurring payments based on resources.
  • The data center’s reliable power, cooling and internet.
  • Scalable resources: processor, memory and disk grow as the service grows.
  • Equal access for all branches and remote employees.
  • Snapshots and VM backups are simple.

Challenges:

  • Users depend on the office internet connection for access; an internet outage means lost access, unless there is a backup link.
  • For moving very large amounts of data, internet speed is a limiting factor.
  • Monthly costs add up over the years and should be compared against the total cost of a physical server.

Which Service Goes Where?

  • Multi-branch financial and administrative software: usually a cloud server; all branches connect to one stable central point.
  • Website, email and internet services: a cloud server or hosting; these services do not belong in the office server room.
  • A file server with very large files: often a local server or storage device, with an off-site backup.
  • Test or temporary servers: a cloud server; quick to create and then delete.
  • Domain controller: usually one in the office for fast user logins and, if needed, another in the cloud or at another branch.

Many companies choose a hybrid model: services that need fast local access stay in the office, and the rest go to the data center, with a secure VPN between them.

Calculate the Total Cost Correctly

For a fair comparison, calculate costs over three to five years: the price of the server and disks, licenses, UPS and cooling, power, maintenance and repair, and the time your IT team spends on the server. On the other side, put the recurring cost of the cloud server, plus backup and the bandwidth required. Often, once the hidden maintenance costs are visible, the picture changes.

Questions to Ask Before Choosing a Cloud Service

  1. How, and how quickly, can resources (processor, memory, disk) be increased?
  2. How are VMs backed up, and how long does a restore take?
  3. How is a secure connection between the server and the office and branches established?
  4. Who is responsible for managing the operating system, updates and security?
  5. How and how quickly does technical support respond when there is a problem?

Conclusion

A cloud server is usually the better choice for services that must be reachable from anywhere and always stable, while a local server is better for fast access to large amounts of data in the office. ITPlus724 supports both paths: cloud servers and Windows and Linux virtual machines in the data center, as well as on-site server deployment and maintenance. ITPlus724 engineers can recommend the right mix for your company based on your services and budget.

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