Why on-site servers cost more than you think

The alternative to on-site servers for small businesses may cost less than the electricity needed to run one.

Even in this age of online business apps and cloud computing, small businesses up and down the country are still running on-site Windows servers.  Some business software isn’t yet cloud-based and still relies on a local server to share data and documents.

The alternative, using cloud environments like Hosted Remote Desktops aka Desktop as a Service or DaaS, is an easy and obvious way to move these key lines of business applications to the cloud and enjoy all the benefits and freedoms that brings.  Yet, many small businesses look at the cost of hosted desktops and argue that they “could buy our own server for that”. 

So, let’s bust that myth.

Take the example of a small business wanting to run their accounting software on a local server to share the data between the 5 people in their accounts department.  Running that on a Hosted Desktop would cost about £30 per user per month, or just under £1,800 per year. 

The argument goes that after 2 or 3 years the business could have bought their own server and hence save money.  Not true.

A typical server aimed at small businesses will consume about 850W of electricity, and at current energy prices the business might be paying £0.35 per kWh.

Some quick maths:

0.85kW x 24 hours x 365 days x £0.35

= a staggering £2,606.10 a year.  Just for the electricity.  

Already £800 more than the alternative hosted desktop solution.

Add on to that the cost of Windows server licences.   There are different editions of Windows Server but the most likely edition a small business will require is Windows Server Standard.   There are various ways to licence Windows Server Standard, as an example Windows Server 2022 16 Core License Pack with 5 Windows CALs is listed at £1,400 on the Microsoft Store.

You then need to consider IT server support at an approximate £100 a month, plus antivirus software and a good backup solution and you’ll probably add another £50 to £100 a month to your server costs.   Of course, we haven’t yet included the price and setup costs of the server itself.   Budget £5k - £7k depending on spec.   Suddenly the idea of running an on-premise server seems slightly extravagant.

If you’ve not encountered Hosted Desktops before they enable businesses to run any Windows desktop applications on secure, dedicated, cloud-based virtual machines that can be accessed from anywhere in the world over an internet connection, making home working and remote working easy.   Hosted Desktops can also be accessed from non-Windows devices so our business running Sage 50 as an example can now enable its team to work from home on their Apple Macs if they choose.

Your Office Anywhere is a Burnley-based company and have been helping small business to run any Windows business application in virtualised environments for over 15 years and would be happy to advise Lancashire business owners looking for ways to make their IT work more flexibly without increasing costs.