Rose Report: Issue 13

The Server Dilemma

When it comes to deciding how and where to house their technology, organizations now have several options. It’s simply a matter of weighing the pros and cons to determine which solution most closely matches a company’s individual needs.

Organizations that buy their own servers and host them onsite shoulder both the costs and responsibilities of ensuring their software and hardware function correctly and stay up to date. Because servers require constant maintenance and upgrading, these companies must either employ their own full-time IT staff or pay an outside technology firm to monitor their servers. If the servers falter, it’s up to the organization that owns them to immediately remedy the situation.

Though hosting and owning your own servers is generally more expensive, for very large organizations—typically in the $100 million-plus revenue range—it can certainly be the more cost effective option. Though buying your own servers involves a sizable upfront investment, an organization of that size requires so much storage space that maintaining its own servers and hiring dedicated technology staff often proves to be cheaper over the long run than renting the space.

Still, many companies find that renting server space from a firm that specializes in providing such services is the best way to go. Renting relieves an organization of the responsibility of monitoring and maintaining the technology, since it falls entirely to the outside firm to ensure the servers are running and that any downtime needed for maintenance is scheduled in advance. Firms that rent out server space also provide support desk help as part of the service package, and they prevent information from getting lost by coming equipped with secure back-up systems. By comparison, companies that host their own servers may not have the resources to consistently back up their systems and stay up to date with the most cutting edge solutions.

A third option is the cloud-based solution, where a company pays a monthly fee to store its data in the cloud. This is a particularly attractive choice for small organizations and start-ups with clients and/or employees across different locations that require remote software access. Just like renting space on traditional servers, using cloud storage eliminates an organization’s responsibility for trouble-shooting, maintaining, and upgrading its technology.

Though a cloud-based approach is often more cost effective—and, indeed, moving toward the cloud is the trend—it’s not always the right answer. According to a recent Forbes article, for established small businesses with servers that need replacing, transitioning to the cloud can still be as expensive or even more costly than buying new servers and paying an outside IT expert to regularly maintain them. The cloud also usually can’t accommodate organizations that need to extensively customize their software.

Having options is a good thing. But it also means organizations need to educate themselves to make sure they choose wisely.