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Cloud vs. In-House Servers: Advantages and Disadvantages

By: Total Computer Solutions

Businessman hand working with a Cloud Computing diagram on the new computer interface as concept-Nov-23-2020-02-06-21-94-PM

Maybe you are starting a new business and deliberating on whether you should buy an in-house server(s) or embrace the cloud from the start. Or perhaps your server is old and outdated, and you wonder whether to replace it or move to the cloud. It may be that your enterprise has outgrown your server, and you are torn between buying a larger server and migrating to the cloud. Regardless of why you are deciding between an in-house server and the cloud, it is a challenging decision to make. This article is intended to help you make this decision by presenting each option's advantages and disadvantages.

In-House Servers

A few years ago, the cloud was a more attractive option for large enterprises, while small and medium-sized businesses often used in-house servers. In–house server(s) that were physically located in the workplace tended to host applications do file sharing and other office essentials. In-house servers are still a viable option for small businesses and startups, but trending toward more people beginning with the cloud.


  • In-house server(s) give a business complete control of the physical server and their data. You know where your data is and that provides a level of comfort.  
  • No ongoing expenses. Yes, the server is an expense, but all you pay for is maintenance once you own it. 
  • Security: The security of knowing your data is in the back room—the security of being a single dot in a vast internet ocean. 


  • A server needs to be sized for peak load even if peak load only happens twice a year. This translates to a more considerable upfront investment to buy the hardware and licensing that will carry you through those occasional peaks of demand.  
  • Carrying costs: Normally, a server runs 24x7x365 and requires power and power to cool that room or that space. Even if people are not in the building, the server requires comfortable temperatures. 
  • Rapid growth: if you outgrow a server, you can increase capacity, but if you are growing rapidly, you may have to start over with a new larger server to replace the one you already own. That can be very expensive.  

Cloud Servers

There is a growing trend towards businesses of all sizes and industries moving to the cloud. Here are the advantages and disadvantages of the cloud.


  • Low capital expense: you do not have a considerable upfront cost for hardware and licensing. Also, you may not have as many fees for maintaining your server. Typically, a new business can get up and running with lower startup costs by using the cloud. 
  • Scalability: If you grow quickly, you can add more storage or memory to meet your changing business needs. Also, the cloud platform is, pay for what you use. If you need less capacity, you can turn things back down.  
  • Virtual access is easier: with servers in the cloud, it is easier for employees to access data remotely from anywhere, anytime, as long as they have internet connectivity.  
  • Security: although you must trust the organization hosting your server(s), they likely have significantly more experience protecting servers than you or your internal IT department. 


  • Requires a reliable internet connection to operate optimally. When your internet connectivity is down, you cannot access your server. It might even require a second backup internet connection, depending on your need for uptime. 
  • You will probably spend more on hosting over the long term than if you go with the in-house server(s). If you compare apples to apples, building a 99.99% uptime solution would cost with in-house servers would be prohibitively expensive. The cloud servers provide you with a much more robust solution for a slight increase in costs. 
  • You have to rely on your hosting company for security, and that can be a concern since you will probably never meet them, and they may live on the other side of the country. 

Buying a Server or Moving to the Cloud

The process of making this decision is not easy, and expert help is what we would recommend.

An onsite server allows you physical control over your server and keeps critical data in-house. However, the initial cost of setting up the server, licensing, more can be expensive when coupled with maintenance and upgrading expenses.

If you move to the cloud, your upfront costs are negligible, and you enjoy a greater ability to scale. A reliable and robust internet connection is required, and be ready to pay monthly fees, which could equal or cost more than an in-house server.

Should you go for a cloud server or use your in-house server?

As with many business technology solutions, there is no direct answer. The option you choose depends on your business needs and budget. The cloud has many advantages, especially remote access and dedicated service providers who keep everything running on your behalf. However, depending on your needs, it might not be your best choice. 

It would be best to consider factors like internet bandwidth, power stability, and business software type before choosing a server solution. Suppose you have limited office space, unreliable power, a need to work remotely, aging server(s) hardware, and robust internet bandwidth(fiber). In that case, it might be time to migrate to the cloud. Contact Total Computer Solutions, and we will be happy to help assess your fit for a move to the cloud. 

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