At some point in the life cycle of your small business you may need to think about servers. Perhaps you’re an e-commerce site with ever-increasing visitor numbers. Perhaps the demand for shared storage and printers has gone beyond the capabilities of your company’s router. Maybe there’s a need to manage emails for an increasing number of employees. Maybe your IT guru is worried about what happens to the data stored on your Cloud account if the internet goes down locally.
If any of that sounds like you, then guess what, it’s time to choose a server. Time to take control and find a way to get something to be the control center of your business. Want to know how to do this? Then read on.
You can rent, buy or co-locate a server (this is when you buy a server and locate it in a hosting provider’s data center). There are advantages and disadvantages to each option. When it comes to server costs for a business it’s best to weigh up what works for your business at its particular stage of growth.
Advantages Of Buying A Server
If you have the cash flow, or access to a bank loan, there’s one large upfront fee. The server is yours to use until it becomes obsolete. You can add the server to your company’s assets on the balance sheet. You may be able to deduct or write off its value for tax purposes.
You can physically access the server’s hard drives if you would prefer to store data offline, rather than the Cloud. Plus, you’ll have no periodic leasing charges to pay. The server is there for you to use as you see fit, because you’re not under any leasing agreement.
Disadvantages Of Buying A Server
On the downside, paying a large amount upfront for a server can put unnecessary strain on your business cash flow. You or your staff may need to source a loan to pay the fee, taking people away from other key business functions, such as pulling in new business. Other factors include the expense and training required to maintain the server, for cooling, power and networking. Who in your organisation is skilled enough to look after it if things go wrong? Something to bear in mind is that hardware depreciates quickly, and in a few years, your server may need replacing.
Advantages Of Leasing A Server
You pay a monthly fee to the leasing provider. You enter a contract with them and at the end of the contract you either give the server back or extend the lease. You won’t have to tie up your funds in a large purchase, and you can use the assets without actually owning them. The leasing company are generally liable for support and maintenance, minimizing costs and giving you peace of mind in case the server fails. Your accountant will tell you that leasing a server is seen as an operating cost which can be written off against profits. Plus, it will be easier to upgrade the server as the business grows. If you decide to co-locate a server, it’s securely stored and monitored continuously.
Disadvantages Of Leasing A Server
Leasing long-term is less cost-effective, as you could end up paying more than the server was originally worth. You would have no physical access to your data and if your company were to fail, you would have to copy the data from the server to local storage. If your business plans to use the same hardware for years, it might be cheaper to buy. The downsides of co-locating include an upfront hardware cost, and your company bears any replacement fees.
When it comes down to it you have to take a look at your business and how ti works. that way you can make an informed decision and make the correct choice for you. Always do you research and check out many different companies before you make your decision.