Cloud-based systems outperform on-premises servers. And here’s why…
Owning a server and enterprise planning software outright may feel like a good investment for many business owners; however, the reality is that this technology can quickly become obsolete. This may have been a solid option in past years, but in today’s world of rapid technological advancements, maintaining off-the-shelf software solutions can leave you with more costs and less productivity.
The truth about the costs
You might believe that owning your server means you're set for years, but technology moves fast. What used to last up to five years now becomes outdated more quickly due to software innovations and security demands.
Allow room for growth
On-premises servers are typically sized for a specific workforce and can quickly become inadequate if your business grows. They lack flexibility, failing to scale with your company. This limitation can hinder your business's ability to adapt to market changes and growth opportunities.
Work from anywhere
When your business relies on an on-premises server, you and your employees need to be at work, to work. But people are increasingly working remotely and that’s where a cloud-based solution stands out on top – users can access a cloud service from any device with an internet connection. The accessibility doesn’t stop there, because cloud-based solutions also facilitate enhanced collaboration via features like document sharing and real-time communication.
Understanding backup costs
Backups are essential, yet many businesses lack clear knowledge about their backup systems, whether onsite, offsite, or both. The cost of downtime is significant—being unable to operate even for a day can lead to substantial losses in production and sales. Effective backup solutions function like an insurance policy. This is a crucial factor that businesses often overlook when considering the total cost of ownership for their server infrastructure.
The cost breakdown
When considering your options, compare all the costs that come with traditional server solutions against the total monthly subscription fee you pay for a cloud-based system. On-premise solutions often separate software and server expenses, obscuring the true cost.
Here's a breakdown for a typical server/software package for a small to medium-sized enterprise (SME) with 15 users:
- Server hardware: $15,000
- Software and user licenses: $10,000
- Onsite NAS backup: $5,000
- UPS (Uninterruptible Power Supply): $3,000
- Total hardware cost: $33,000 (amortised over 3 years comes to about $920 per month)
- Monthly IT maintenance: $750
- Offsite backup and server replication: $350 per month
- Plus additional costs for the off-the-shelf ERP software: $10,000 - $100,000
The cloud alternative
Cloud systems offer an all-inclusive pricing model that can be more transparent and often more cost-effective than maintaining physical servers. The scalability and flexibility provided by cloud solutions make them an ideal choice for growing businesses. They seamlessly adjust to increased demands without the need for significant upfront hardware investments or ongoing maintenance headaches.
Wrapping up
When weighing the pros and cons of on-premise versus cloud-based software, it's crucial to consider not only the upfront and ongoing costs but also the strategic advantages of flexibility and scalability. As technology continues to advance, cloud systems are increasingly becoming the smarter choice for businesses aiming to stay competitive and agile in a dynamic market environment.
Contact us at Synergy Software today to find out how our solution compares to others you are exploring.