Why the price of the box is the smallest part
When a server needs replacing, the first quote is usually for the hardware. But the hardware is only one line in the real cost of running a server over its life. Comparing it fairly with cloud options means counting everything, on both sides, over the same number of years.
The costs of an on-site server
- Hardware, sized for today plus growth, with redundant disks and power supplies.
- Licensing: the Windows Server licence, plus client access licences for each user or device, plus any database or application licences.
- Protection: backup software and storage, an off-site or cloud copy, and endpoint protection for the server.
- Power and environment: a UPS to ride through power cuts, suitable cooling, and a secure, ventilated space.
- Support: monitoring, patching and someone to fix it when it fails.
- Warranty and replacement: extended warranty cover, and budgeting to replace the server when it reaches end of life.
The costs of cloud alternatives
- Subscriptions: Microsoft 365 for email and files, Azure virtual machines for applications that need a server, or Windows 365 Cloud PCs.
- Storage and backup of cloud data.
- Connectivity: a reliable connection, ideally with a backup line, because staff depend on it to reach everything.
- Management: cloud services still need configuring, securing and monitoring.
Island factors that change the sums
- Hardware lead times and shipping. Servers and spare parts usually come from the UK, which can add time and cost. Keep that in mind for both purchase and repairs.
- Power resilience. If your building has had power interruptions, a UPS and graceful shutdown are essential for an on-site server.
- Connection resilience. If you move to the cloud, a second line from a different island provider is cheap insurance.
How to compare fairly
- List what the current server actually does. Some roles may disappear entirely by moving to Microsoft 365.
- Cost each option over the same period, typically the expected life of the hardware.
- Include support, backup and replacement on both sides.
- Weigh the non-cash factors: remote working, resilience, security and how much in-house effort each option needs.
Common questions
Is cloud always cheaper?
No. For some workloads, such as large local files or specialist software, an on-site server can still be the better value. For many small offices, moving files and email to Microsoft 365 removes most of the reason to have a server.
What if our server is still running Windows Server 2012 R2?
It no longer receives security updates and should be replaced as a priority. See our Windows Server 2012 R2 guide.
Get a costed comparison
We will look at what your server does and give you a side-by-side comparison of the realistic options. Book a free IT Discovery Session or read about our managed IT support.