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How do SMB servers work?

Small business servers mostly function like traditional PC computers. They maintain similar components like power supplies, CPU, RAM, and most everything else you would expect in your desktop computer. 

The features and benefits, however, vary depending on whether they are on-premise, in a data center, or operating in the cloud.

On-Premise (Dedicated) Servers

On-premise servers come in the form of a tower (think of your desktop computer without a monitor, keyboard, and mouse) and are stored under a desk or in a closet somewhere in your office. This is the typical choice of small businesses looking for an entry-level server solution. 

Additionally, these dedicated servers can also be rack-mounted. With a uniform height, width, and depth, multiple servers are stored together on a purpose-built server rack, making the physical storage of your server setup easier to manage.

Whether you choose a tower or rack-mount server setup, the components are similar throughout.  

Your server will need a hard drive (HDD) for storing files and data, a Central Processing Unit (CPU) and memory (RAM) for running software, and some sort of consistent power supply with battery backup so you can safely shut it down if your office power goes out.

There are multiple advantages to choosing an on-premise server. First, there’s a fixed cost of ownership. You purchase the server once, and most times, you only need to pay a one-time licensing fee for your Windows server operating system. 

A second advantage is that a dedicated server is fully customizable. You’re in control of your entire setup and decide how powerful and fast your server operates. You are also in complete control of how your data are split across your server, desktop, and other network infrastructure. 

These types of servers can often also be faster to access than off-site or cloud-based servers, as there’s less delay in communication between your server and all the devices trying to access it. 

In addition to requiring a large up-front cost to buy and configure, on-premise servers require IT staff to manage day-to-day operations. 

And depending on your usage and components, you’ll need to upgrade or replace your hardware at some point (this timing varies, though every 4 years is typical).

And because on-premise servers are by definition located on-site, you’re completely responsible for creating and managing your failover process and implementing the additional infrastructure needed to protect your servers from:

This can be challenging for smaller businesses to manage on their own – which is why they’ll typically hire a Managed Services Provider like Commprise to manage this work for them.

Off-Premise/Data Center Servers

Off-premise servers are similar to on-premise ones in that there’s often some physical hardware selection and management involved, though in this case that hardware is located outside of your offices in a purpose-built data center managed to some degree by another company. There are some unique advantages to this.

Like on-premise servers, you can still choose the power and speed (CPU/RAM) of these servers. In some situations, data centers may even provide you with hardware-for-rent.

Colocation facilities also offer physical security through 24/7 monitoring, ensure certain redundancies are in place (such as power backup and proper cooling of equipment), and in some cases, even offer further services like setup, configuration, and server maintenance.

And while these are great advantages, using a data center means you have less control over your server infrastructure locally. If there are any major problems or security concerns, depending on the data center, your IT staff is responsible for addressing any issues. 

Additionally, the quality of your colocation infrastructure could vary depending on the internet connectivity at your physical office location as well as equipment selection and other configuration factors. 

These are all things to weigh carefully when choosing these kinds of servers.

Off-premise servers are a good solution if you still want physical control of your systems, but your business doesn’t have the time, budget, or personnel to handle long-term technological maintenance. Colocation facilities will provide you with the infrastructure and security associated with dedicated servers without the cost.

Fully Cloud-Based Servers

Fully cloud-based servers are virtual servers that operate in a cloud computing environment. Like on- or off-premise servers, they are a utility that provides access to computing resources. 

But unlike these other servers, cloud-based servers eliminate the need for physical infrastructure selection and management for your business. Because you’re not managing any hardware, you can allocate more speed, power, and storage as needed. You get 100% control with no need for physical maintenance (though there are still non-hardware-based maintenance needs in cloud server setups).

The advantage is that cloud-based servers make scaling your business’ computing resources to handle more clients, employees, or offices much easier than on- or off-premise servers. 

And since most cloud-based servers work on subscription-based plans, the cost of scaling your server’s capacity is more predictable. If your company hits a stride or you need easier and more reliable access for remote users, you can simply upgrade your plan.

An obvious disadvantage of cloud-based servers is the potential for downtime. Because you’re dependent on the internet to access your cloud, if it fails, then you lose access. That being said, while on-premise servers won’t have this issue, cloud-based servers are very reliable due to the redundancies and failover systems providers put in place.

There’s also the potential for more security risks. It’s important to check with your cloud service provider to determine what precautions you’re responsible for to mitigate your vulnerabilities.

​​​​​​​​​​​​​​Does your small business need on-premise, off-premise, or cloud servers?

There are multiple factors that can help you consider the best type of server for your business.

Growth trajectory

Before deciding on the server setup for your small business, consider the growth trajectory of your company. 

Are you rapidly adding more employees, clients, locations, or consistently incorporating new technologies into your business processes? In this case, it might make more sense to rely on cloud-based servers due to their ease of scalability.

Are you planning to keep your organization small and intimate? Then installing a server on-premise (or off-premise in a data center) might make more sense for your company if you’re not needing to access information from remote office locations. You could even utilize cloud-based servers for specific software applications and shared data. 

Again, consult with an IT services provider to help determine what makes the most sense for your small business’ growth trajectory.

Total Cost of Ownership (TCO)

Another consideration is the total cost of ownership (TCO). If you don’t mind managing and maintaining hardware, or paying for software licensing internally, then an on-premise solution might be more beneficial. While the costs are higher upfront, the long-term TCO is lower.

As we mentioned earlier in this article, if you want physical control of your systems but don’t have the time, personnel, or budget to handle long-term maintenance, an off-premise server solution could be your best bet. The costs vary depending on your hardware requirements and the services you require from a data center, but colocated servers allow you to invest in your infrastructure without having to actively manage it in-house. 

If you don’t want to manage hardware, maintenance, or licensing fees, then it might make more sense to opt for a subscription-based model and utilize cloud-based servers. The barrier to entry is smaller and it’s easier to scale if needed because you’re not managing or maintaining physical infrastructure, granted, the TCO is higher in the long-run.

Security concerns

Security concerns are another factor to take into account before deciding on what type of server makes the most sense for your small business. This is an especially pertinent consideration if your company handles sensitive financial and personal information.

If you’re able to manage (physical and network) security yourself, using an on-premise server could potentially be a more secure solution. If you’re not confident in your abilities, a co-located server in a data center may be a better option as data center staff help to maintain the physical security of your servers – though you’ll still largely be responsible for IT security (securing the network, maintaining application updates, encrypting data properly, etc.).

Contrary to popular opinion, cloud-based servers are not inherently less secure than on-premise servers, as there are security measures your IT department and hosting service can ensure are in place.

Again, if you’re uncertain which type of server best complements your small business, consult with an IT service provider to determine the best setup.

Access to shared data

If your company relies heavily on shared data, the type of server that best suits your needs depends on who needs access to that data and when. 

An on-premise server might be beneficial to businesses with a smaller footprint and that don’t need access to shared data outside of a physical office space. However, if you’re intending to rapidly expand your business, employ remote workers, or provide contractors access to data, it makes more sense to invest in a server solution that makes shared data between employees more accessible. 

No matter which server setup you choose, it’s vital you limit access to shared data exclusively to the people who need it in order to mitigate security risks.

Backup/recovery systems

What kind of backup and recovery systems do you want to use? This is another factor to consider before deciding what type of server your small business needs. 

If you’re hosting servers on-premise, it’s a necessity to have a business continuity and disaster recovery plan in place.

If you prefer to take a more hands-off approach and utilize data centers or cloud-based servers, they can help oversee backups and recovery in case of an outage. While outages are less common in these environments, they still happen. Your access to information could also be limited if the entire data center goes down or fiber lines into your offices get cut.   

A server is an effective way to simplify information access control and management for your business. Whether you’re trying to increase data and network security, make it easier to share files and applications amongst personnel, or transition your dependency into a more virtual environment, implementing a small business server into your IT infrastructure can help you do that. 

An on-premise server, data center, cloud-based server, or combination thereof may be more beneficial depending on the needs of your business. An IT services provider can help you determine a solution that best fits your needs. 

Commprise is here to help you gain clarity on this matter. With our Managed IT Services, we’ll help you find out which solutions and servers are best suited to serve your company.