Do you replace your server or move to the cloud?

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Is your server getting old and have you pushed it to the end of its life? Now you’ve reached the stage where its time to do something about it. So now the question is.. do you replace the old server with a new server, or do you move to the cloud?

Everyone uses the cloud in some shape or form.  With apps like the infamous icloud, dropbox, carbonite, we all use the cloud everyday in some way. We’ve been told that the cloud makes us more flexible and saves money on IT costs. It makes employee access easy and they can use it on any device.  So you decide to throw away that old server and move to the cloud… but wait!

Business owners and managers who have existing applications running on servers are not going to the cloud.  Instead, they buy new servers. Six of my clients in the past 90 days replaced servers.  They had waited as long as possible, saving cash in a slow economy, hoping to get the most out of their existing machines. But the servers were showing their age, applications were running slow and now the companies found themselves growing their infrastructure and their old machines were reaching their limit.  Things were getting to a breaking point, and all six of my clients decided it was time for a change.  So they all moved to cloud, right?

None of them did. They did not choose the cloud.  Why?  Because all six of these business owners and managers came to the same conclusion:  it was just too expensive.

Consider the options.  They evaluated cloud based hosting services from Amazon, Microsoft and Rackspace.  They also interviewed a few IT management firms who promised to move their existing applications (Office, accounting, CRM, databases) to their servers and manage them offsite.  All of these popular options are viable and make sense, as evidenced by their growth in recent years.  But when all the smoke cleared, all of these services came in at about the same price:  approximately $100 per month per user.  This is what it costs for an existing company to move their existing infrastructure to a cloud based infrastructure.

Now do the numbers:  $100 per month x 20 users is $2,000 per month or $24,000 a year for a cloud based service.  How many servers can you buy for that amount?

For these clients the decision was easy: they bought new servers and our IT installed them.  But can’t the cloud bring down their IT costs?  All six of these guys use our IT guy for maybe half a day a month to support their servers (sure he could be doing more, but small business owners always try to get away with the minimum).  His rate is $150 per hour.  That’s still way below using a cloud service. You do the math, then call us when your ready to upgrade!