There are some advantages for moving your server out of your small business, however, it’s not for everyone.
You can save on taxes, cut a high capital expense, and off-load server maintenance costs.
Cloud servers are really great for businesses that are dispersed, or are experiencing rapid growth. Perhaps you need a server NOW, and you expect your computing needs will change in the coming months.
A cloud server can work for businesses as a stop gap–once you stabilize you could move to an on premises server.
If you are expecting a stable business environment, and expect to use the server for more than 3 or 4 years, then we should look at a real total cost of ownership comparison.
The cloud is a network of data centers and servers around the world in which businesses share costs and resources. There are thousands of servers supports hundreds of thousands of users. You are probably using a cloud based email service, and a lot of disaster recovery tools are hosted in the cloud. Your on-line banking, and even your business website are probably hosted in the cloud. In essence your rent the server space instead of owning it.
One of the areas that may be beneficial for a lot of small businesses is hosting your entire server environment in the cloud. Instead of spending $7000 on a new server you can amortize that cost over several months, making the expense an operational expense and not a capital investment—with all the tax rules and implications your CPA might advise you on.
There are some things you should consider, other than tax implications, in moving your server to the cloud.
- How often you’re using the data applications, because some cloud provider charge a transaction fee.
- Are you using applications that we suited for cloud servers? Some applications (like some accounting applications) are not designed for cloud based solutions.
- Do you expect a rapid change in your business in terms of growth? The cloud is easily scalable, and may be a better fit than an on premises server.
- Are you expecting a physical move and can’t have business stop during the transition?
- Is your staff spread out across Colorado, or the country?
If you are ever concerned about how you can use the cloud more effectively in your business, we are here for Colorado Springs small business owners to help you increase productivity and security by empowering your people with the right technology.