If you are not in an IT-related field or a software architect, the thought about “servers” and “hosting” will rarely be something that you consider on a daily basis. For the mentioned professionals, however, these decisions are critical to the operations of a business – however large or small.

There is a fine line between how and where software systems that allow for smooth business operations are implemented. This line has become thinner in the advent of rampantly evolving technology and automation. Finding the right IT architecture could therefore either help your business stay afloat, sail the high seas, or sink.

The most effective mode of communication in any business, other than verbally or telephonically (which can sometimes get lost in the information abyss), is still the electronic mail or E-mail. It is effective because it helps to form a time-stamp and a reference point when it comes to documentation. This is an important aspect when it comes to legal obligations and commitment – which basically is what running businesses are about. Emails for one are, therefore, something that should not be taken for granted!

We consequently send, receive emails with attachments and receive them through various devices without a second thought as to how this happens. After all, this is the job of the IT-guys, right? Well quite rightly so and they often must battle with their respective management and board of directors for funds to keep this going without compromising operations – from not only a daily functional point of view but from a security and software compliance facet.

A company’s IT infrastructure: Emails, File-servers, Databases (CRMs and ERPs) and other communications tools are commonly hosted (managed) on-site on systems referred to as on-premises ‘on-premise’ solutions. These are managed by computer-like CPUs (they look like the standard boxes that you plug your monitor and keyboards to but have a lot more processing power and storage) and are called Servers.

These Servers naturally must be kept cool because of the heat they generate from being on all the time – and as you can imagine, built-in fans are not enough to cool them off. If you didn’t know, there is likely a (highly) protected server room in your building that is kept as cold as the cold storage for meat factories.

Now there an array of Servers types – each designed to run the tasks of mail exchanges, file-storage, and sharing, the storing and deploying of remote PC operating systems, databases and many more dedicated functions. Each Server providing unique services would need to have the licensed software to operate them – making it quite an expensive outlay if you have all the above needs!

Servers, however, are not irreplaceable and can overheat, get corrupted like a hard-drive (or a NAS server system) and crash and must thus be maintained at a cost to the company – via its IT department (sometimes outsourced) and the software license providers.

We then got the wind in the early 2000s of what is referred to as ‘the cloud’ or ‘cloud computing’. Cloud-computing is basically a very large set of high-end servers equipped with software to manage all the tasks mentioned above and offered as a service under a subscription.

So basically, you are renting the service of a server as opposed to owning it. Renting, like with that of property or cars, relieves the user of all the costs of running the product in question. This sort of rental service offered by cloud service providers is now known as Software as a Service (SaaS). This would also save you from purchasing any hardware let alone paying for the extra electricity bill to cool down a server room.

According to Quora.com, the main difference between a cloud and a data center is that a cloud is an off-premise form of computing that stores data on the Internet, whereas a data center refers to on-premise hardware that stores data within an organization’s local network.


This drives IT managers and professionals to the burning question of whether one opts for a solution that will not only relieve them of mundane tasks such as server maintenance/upkeep but also the daily administering of user profiles, mail/data archiving and backups and to what costs?

There are many pros and cons when comparing the hosting of a company’s data on a server versus having it run via the cloud – and a decent array of choices and bundles between the top cloud-service providers, make the decision-making process a little harder.

Cloud service providers have several data centers used as backups. So one service (like email hosting) will have several centers in different locations (with high-capacity servers) to serve that function alone – curbing the risk of your data being compromised, disrupted or even hacked. Naturally, these centers are kept secure – in mostly undisclosed locations globally. Google is known to have one of its data centers floating on a massive container ship somewhere. Maintaining them is expensive as they also obviously require massive cooling systems – some companies like Microsoft, are even now taking to the deep oceans for that function.

When it comes to email hosting or the storage of files in the cloud nowadays only five large multinational corporations’ names come to mind: Microsoft, Oracle, Google, IBM and Amazon.

Setting up an on-premise solution, in contrast, can be a tedious exercise and an expensive one especially for individual companies who do not have large IT budgets. The argument of “once-off” paying to own the server is rendered obsolete because the actual hardware and license models change very quickly these days.

Licensing a server is no child’s play either: having to decide on costs and functionality will determine whether to license per server, per virtual machine needed, or per processor core and then you need CALs) – and if you don’t believe it, just have a look at this licensing guide!

So, considering that, at the rate of advancement of technology, the time to revisit that big budget also becomes shorter resulting in more of a company’s profits being redirected to IT architecture to keep up the productivity of its users.

To illustrate this, an outlay of a hundred thousand dollars just for the software licenses for 3 years would thus have to be weighed against a cloud-hosted solution/package that performs the same function and often more (you can literally piggy-back off their security N26_banner-300x250-ENservices), which then costs 8 thousand dollars monthly.

So, within 3 years of using the cloud, you would have reached the $100K that would be spent only for licenses and saved with an extra $188K in additional services that would have been (a portion of what would have been) spent on maintenance, technical support, security and upgrades/updates.

These figures are rudimentary, but the long-term savings are noticeable as cloud service providers tend to provide value-add solutions when pricing their bundles. Microsoft has for one, recently launched its Microsoft 365 package which includes an upgrade to the latest operating system (Windows 10 Professional or Enterprise) – something IT professionals would have had to source separately. Software deployment and the administration of user accounts is cloud-based – performed conveniently and remotely from a PC, Laptop, Tablet or even Smartphone!

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This means IT professionals will now have more time to oversee more important issues like data security and overall IT policies or, better yet: looking into ways to automate and improve systems further without the inconvenience of running from PC-to-PC to install operating systems, Office software or manage mailboxes. The remote desktop services of an on-premise server were one step in this direction but are a pain to set up. So, one can consider the cloud as an evolution of remote-desktop services.

The only (and potential) hindrance to using cloud services naturally would be the availability of good and cheap broadband (Internet connectivity). Without both, the justification for running your business fully on the cloud would not stick. Some businesses, especially in developing countries, are, in a desperate attempt to adopt the cloud in the future, using what is known as hybrid-systems: a combination of cloud and on-premise solutions.

120x600Companies operating in countries without forward-thinking government officials that facilitate broadband availability will suffer the most as they then are stuck with older hardware and technology. Like an old, car, outdated hardware and software will be subjected to costly services (especially for out-of-date and warranty solutions). This means heftier maintenance fees and support costs from third-party IT professionals who bill by the hour – because the jobs take a while due to a struggle with the compatibility of old and new systems.

The common old rhetoric of not trusting the cloud is also one of the past. Cloud services often outperform on-premise solutions when it comes to high-end security software and data protection because of the obvious economies of scale involved setting up expensive security software. In addition, and quite obviously, when dealing with sensitive data for financial and legal services, hospitals, educational institutions – who use the cloud in some capacity – the security would naturally have to be the digital equivalent of Fort Knox!

So, rest assured the cloud-providers go all out to keep the trust of their clients via highly secure, stringent and compliant security systems.

With data now being treated as commodities and the subsequent need to trade and value it, we now have in the advent of the Blockchain, digital currencies like IOTA and Dogecoin being used to facilitate payments, while keeping the data encrypted, decentralized and secure.

Lastly, in the advent of the new GDPR laws, companies opting to keep their servers may continue to maintain their security internally but might lack transparency needed to show their consumers how their data is being handled.

They are thus having to source out third-party solutions to keep their data management systems compliant – adding further costs to a problem that could easily address by subscribing to a SaaS solution.


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