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Cloud or an office server? How to compare the costs

Sellora Group team

· 2 min read

The price of the server and licences is only the start. To compare an office server with a cloud app fairly, count every cost over the same period, ideally three years.

What an office server costs

  • buying a server or a powerful computer, and replacing it after a few years,
  • system and software licences,
  • a backup power supply (UPS) and electricity,
  • backups: an extra disk or a service,
  • IT time: installation, updates, repairs,
  • downtime when something breaks.

The last two are the easiest to forget, and often the largest.

What the cloud (SaaS) costs

  • a subscription per user or per outlet,
  • devices to work on: a computer, tablet or phone, often ones you already have,
  • an internet connection, ideally with a backup,
  • one-off setup and data migration.

Servers, updates, backups and monitoring are included in the subscription.

How to count the cost over three years

List the items from both lists and assign your business's amounts to them. Add one-off costs once and multiply monthly costs by 36. For the server, add IT time: hours per month times the hourly rate. For both options, add the cost of downtime, meaning what you lose in every hour you can't sell.

Beyond money

The cloud gives you access from anywhere and updates without your involvement. An office server gives you full control over the data and keeps working when the internet fails. If you have several outlets or no IT person, the cloud usually wins. If you process data that must legally stay on your premises, a server may be necessary.

What to watch for in the cloud

Check where the vendor stores data, how often it makes backups and whether it will sign a data processing agreement with you (GDPR). Also ask whether you can export your data if you leave the service.

Frequently asked questions

Is the cloud cheaper than an office server?

Often, yes, once you count every cost over three years, including IT time and downtime. A server can pay off at a large scale or with special legal requirements.

What happens to a cloud app when the internet goes down?

A cloud app needs a connection. It is worth having a backup link, such as an LTE modem, and asking the vendor how the system behaves offline.

Author

Sellora Group team

Sellora Group is a Polish technology company from Mława. We build SaaS apps for businesses: Sellora, a cloud POS system, and Halokurs, software for taxi companies.

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