The Pros and Cons of a Cloud Provider vs a Physical Server

Local IT support for cloud and physical servers

Has your business outgrown its physical server? Are you expanding to different locations or even different countries? Or is it simply time to upgrade your old server to keep up with business demand?

You don’t need us to tell you how important your company’s server is to your business. Depending on the size of your company, an hour of downtime can cost you anywhere from $10,000-$50,000 (or even more) in lost revenue. The same survey states that 37% of SMBs have already lost customers due to unexpected downtime.

Maybe you’re a bit old-fashioned and you like the idea of a physical server for a business. Maybe everyone is telling you to make the switch to a cloud provider, but you have some doubts. Is the cloud the best option for modern businesses, or is there room for a hybrid model?

Be Structured, a Los Angeles managed service provider, believe the truth depends on your company’s specific needs.

Keep reading as we discuss the pros and cons of a cloud provider vs a physical server.

Cloud Provider vs a Physical Server

Before we start getting technical, let’s take a moment to make sure we’re all on the same page. In case you haven’t had the chance to ask your IT provider these questions, here’s a brief overview of our topic today.

What Is a Physical Server?

Back when “the cloud” was something floating in the sky, businesses had only one option for storing their company’s data: a physical server. (You might also hear them called dedicated, local, or in-house servers.)

This includes all the physical hardware needed to run the business, such as:

  • A motherboard
  • CPUs
  • SSDs
  • Memory (RAM)
  • An operating system
  • Network connectivity assets

Servers are usually stored in a data center for the business to use. In most cases, one physical server runs a single application.

What Is a Cloud Server?

Experts first coined the term “cloud computing” in 1996, although the technology didn’t become available to the general public until 2006. In recent years, a cloud server has become the go-to choice for many businesses.

So what is “the cloud,” exactly? A cloud server is a virtual machine that does everything a physical server can do — except it operates in the digital realm. Rather than physical hardware sitting in a data center, it’s a virtual, software-based digital platform.

Cloud servers are built, hosted, and delivered through the internet, which means the data isn’t tied to any single location. Rather, a cloud server offers access to data anywhere, at any time — as long as you have an internet connection.

Is a Server for a Business Really Necessary?

Since cloud storage and SaaS (software as a service) are the latest and greatest solutions, is there really any need for servers anymore?

We’ll dive into this topic in more detail later, but the short answer is yes.

For example, you’ll still need a server to host applications that don’t have a digital counterpart, such as internal or proprietary programs. Servers also act as domain controllers to manage your Windows devices and environments.

Many IT support companies see the need to consider the costs of cloud storage vs physical storage. If your company has a lot of data or you don’t already use services like DropBox or OneDrive, an old-school file server might still be your best solution.

Pros & Cons of a Cloud Server

It’s clear that there’s room in the business world for both physical and virtual servers. It’s also clear that this is a critically important decision to make, as server problems can have a catastrophic effect on your business.

To put things in perspective, consider these shocking stats:

  • 95% of businesses experience unexpected downtime
  • One in 10 servers has at least one outage every year
  • The average server outage lasts for 117 minutes

Which option will help you avoid these outcomes and keep your business running smoothly? Let’s take a closer look at the pros and cons of each, beginning with a cloud provider.

Benefits of a Cloud Provider

Contrary to popular belief, the cloud isn’t a one-stop-shop that’s guaranteed to solve all your problems. IT experts will tell you that it is a powerful tool — but only if you use it the right way.

Here’s why many businesses have decided to migrate to the cloud.

1. Quick to Set up and Scale

Unlike all that bulky hardware, you can set up and deploy a cloud server in seconds. Whenever you need to upgrade your storage or add more resources, all it takes is a few clicks. There’s no need to order or install any new physical equipment.

You’ll also pay for only what you need. If your business experiences rapid expansion, simply call your provider and sign up for more storage. If you no longer need the server, you can cancel the service without having to worry about offloading physical hardware.

2. Less Capital Required

The cost of a physical server and onsite hardware add up quickly. At a minimum, you’ll pay $1,000 to buy a new server (or $100-$200/month to rent one). Keep in mind that this is just one small part of your network installation.

For startups or small businesses with limited funds, the costs of in-house servers may be out of reach. Contrast that with the cost of cloud storage, which averages anywhere from $5-$40/month. This makes it a more economical option for many business owners.

3. Easy to Back up and Restore

As long as you have an active internet connection, you can back up and restore cloud data from anywhere. This includes a smartphone, tablet, or computer located away from the physical office.

You’ll have peace of mind knowing business continuity won’t be a problem — no matter where you and your employees are working from.

4. Improved Recovery Time

Speaking of data backups, a cloud server is an integral part of any solid disaster recovery plan. If the worst should happen — a cyberattack, a fire, or a flood — you don’t have to worry about physical server damage.

Cloud servers enable you to back up all your data as often as every 15 minutes. This will greatly minimize data losses and improve recovery time in the event of an emergency.

5. Enhanced Security and Compliance

When configured correctly, cloud servers can be even more secure than physical servers. Why is this the case?

As an example, Microsoft spends $15 billion annually on cloud research and development. $1 billion alone is dedicated to cybersecurity research. No matter how skilled your in-house team — or how big your budget — you simply can’t compare with resources like that.

Drawbacks of a Cloud Provider

So far, a cloud provider sounds like an obvious winner. To present both sides of the argument, let’s consider a few potential drawbacks of using a cloud storage service.

1. Latency Issues

When you move everything to the cloud, your access is only as good as your connection. Both user experience and the service itself are limited by the speed of the internet connection.

Even if you have fast, reliable internet in your physical office, you may share virtual server space with other businesses. If they’re particularly data-hungry, you may notice poorer performance on your end.

2. Security Risks

Some third-party cloud services may be able to access your data. That’s why it’s important to choose only the most trustworthy providers that operate under strict regulations.

There’s also the unavoidable fact that cloud data is a bigger target for cyberattacks than a physical data center. Even tech giants like Amazon and Microsoft have fallen victim to attacks and service outages.

3. High Costs of Data Recovery

In the unfortunate event that you need full data recovery, the process is often expensive and time-consuming. If your company isn’t very dependent on uptime, the costs could potentially outweigh the benefits.

4. Internet Disruptions

Internet separation anxiety is real. Think of how frustrated you feel if you’re cut off from the online world for even a few minutes.

Now imagine that the internet is down, either on your end or the server’s end, and you can’t access any of your company’s information. This is a real scenario that can happen (albeit temporarily) to businesses that move all of their data to the cloud.

5. Potential Data Caps

In theory, you can upgrade your cloud data storage limit anytime you like. All you have to do is pick up the phone or log in to your account and request the change.

In reality, though, you may always not be able to afford the costs of extra storage. There’s also the possibility of reaching the provider’s maximum cap since “unlimited” cloud storage still comes with some limitations.

Pros & Cons of a Physical Server

Does a physical server for a business still make sense? In many cases, the answer is yes. To round out our discussion, let’s take a closer look at the upsides and downsides of using an in-house server.

Benefits of a Physical Server

Here are some common reasons why you might choose a hybrid storage model that still includes physical servers.

1. Physical Control

Let’s face it — some of us like the security of being able to walk into the office and physically touch our servers. Sometimes it’s worth it just to take one less worry off your mind.

However, there are some advantages to having physical access to your servers. You have greater control over data backups. And if something does go wrong, you can get to work on a solution immediately (rather than waiting for a cloud service provider).

2. No Third-Party Access

All your critical data will be physically stored in-house, which can take another burden off your shoulders. There’s no need to worry about the possibility of unapproved third-party access.

3. No Reliance on Internet Connection

As we mentioned above, an interruption in your internet connection will separate you from the cloud. A physical server eliminates this concern as well since you can still access all your company data as long as the power is on.

4. Fewer Compliance Concerns

Depending on your industry, there may be regulations that require you to store sensitive information in-house. The same is true if you do business with countries in Europe, Asia, or Africa that have strict data localization and privacy laws.

Drawbacks of a Physical Server

What are some reasons you might decide that a cloud provider is the better option? To conclude, let’s consider some potential drawbacks to continuing to use physical servers in your business.

1. Higher Costs

It’s almost always more expensive to host physical servers on your business premises than it is to store data in the cloud. It requires a sizeable capital investment upfront, both for the hardware and the network infrastructure.

2. More Space and In-House Support

You’ll need to have enough space in your office for a rack or server room to hold your equipment. You also need to factor in the costs of in-house or outsourced IT support to come to the office and maintain your servers.

3. More Susceptible to Data Loss

Like all physical items, in-house servers can make a disaster situation even worse. If there’s a fire, flood, or another disaster, you could permanently lose critical data due to server damage. This is one more reason why regular (offsite) data backups are so important particularly in larger cities where power outages can be swift and often. Many Los Angeles IT support companies have several server farms in various locations such as offering backup managed IT services in Pasadena or Orange County.

4. No Guarantees

With physical servers, there’s no guarantee of uptime or recovery time if something goes wrong. You’re limited by what you and your in-house support team are able to do.

Be Structured: Caring for All Your IT Needs

As you can see, there’s no one-size-fits-all answer for choosing the right server for a business. What makes sense for one company might not be as advantageous for another.

That’s why the best IT companies won’t recommend the same solution for everyone.

Here at Be Structured, we understand that each business has unique needs when it comes to networking and security. We’ll take the time to analyze your risks and customize a solution that best addresses the needs of your business. This could include a cloud provider, a physical server, or a hybrid of the two options.

Would you like to learn more about how we can secure and enhance your Los Angeles business? Contact us today and let’s discuss your needs.