Lets just get this out the way, the image here is of a Compaq server. For those of you who have been in IT for less than about 15 years you probably never came across a Compaq server. But they really did exist once, not the mythical unicorns from days of old but real servers that were seen everywhere at one point. Anyway, enough about unicorns let the monolog begin!

Back story

The statement “The server is dead…” really comes from the place for traditional servers in the SME space. When I say the SME space, I mean the real one; not the 250 employees or less arena touted by government but the sub-50 users that we see day to day. For most modern small businesses, the days of needing this huge piece of tin sat in the corner of someone’s office humming away generating heat and consuming electricity are long since gone given the alternative available. Since the launch of Office 365, back in June 2011, more and more businesses have been moving their email systems from onsite Exchange servers to the popular hosted platform which currently houses over 1 million businesses worldwide. Since the launch, the product has been under constant development to bring new features and improved security to its users, many of which come included in the standard subscription.

One such feature, which has reached a mature level, is SharePoint Online which, when combined with OneDrive for Business, is a very competent replacement for the small business fileserver. Another traditional function for servers has been to handling printers but again, modern printers allow directly printing from workstations. While this does not have the centralised management features of a server or the auditing potential, for most SME’s this is not an issue. One thing that is not easily replaced though is when a business has a Line Of Business (LOB) application such as an Enterprise Resource Planning (ERP we love our acronyms) application which has to be run on a server – then what?

The B Side

Where there is a requirement for a server, for things such as LOB or ERP applications (you’re learning the lingo now!), then it may be possible to use a hosted server rather than buying tin to put onsite. There are a number of providers that can supply “virtual tin” such as Microsoft Azure, AWS, Google Cloud, Vultr, Linode as well as many others. Each have their own supply model but they generally run on either a use basis or resource basis, i.e. you either pay for what computing time is used (variable cost for while it’s online) or you pay for the instance to be available whether it’s online or not (fixed cost). Now on the face of it, having a hosted server may appear to be more expensive but that’s not always the case. To demonstrate let do some maths!

Back to school

For the purposes of this exercise, let us say we have a LOB application which uses a web application for the 20 users to perform data entry – so to do their daily work they will log on to the server via a web browser such as Google Chrome or Microsoft Edge. The application itself does not need a massive amount of storage (20GB), as it users Microsoft SQL Express Edition and needs average amount of computing power. If we were to spec up a server to perform this task onsite we would need to take into account potential storage growth as well performance increase requirements. For this example, we will look at a entry level HP Server as follows:

HP ML110 G10,
1 x Intel Xeon-B 3204 6 Core 1.9Ghz,
2 x 1TB 7.2K SATA,
32GB RAM,
5yrs Next Business Day hardware warranty

Approximate cost: £1,500

Windows Server 2022 16 core Standard
2 x Windows Server 2022 10 pack User CAL

Approximate cost £1,300

Total initial costs £2,800

Based on published power consumption usage for this server, the average power usage is 76w. If we use this to calculate the cost using a electricity unit rate of £0.27 per kWh. If we work on the basis that the server will be operating 24hrs per day, 7 days per week then the monthly (based on 28 days) running cost of the server will be £13.79.

This means that over 5yrs, the server will have cost a total of £3,696.30. Now it’s worth noting that this cost does not factor in maintenance, from an IT professional, or backup costs but we’re keeping it simple.

Now, if we look at using a hosted provider to run our server lets see what happens. For this we will use Vultr, as this is a provider I have used for a number of years for different projects.

For this example, we can use one of their High Performance instances located at the London Datacentre which uses 2 vCPUs, 2GB memory, 60GB NVMe storage and 4TB of bandwidth. Including the Windows Server 2022 license, this costs $46 per month, which at the current exchange rate is £35.39 (as at 19th April 2022). This would give a total cost over 5yrs of £2,123.40

You can have an instance without licensing, should you wish to purchase directly, this would be $18 per month (£13.84) which would have a 5yr cost of £830.40 plus license purchase.

The beauty of a hosted platform though is that, should you need more resources, you can simply change to a higher plan which gives flexibility to changes as your requirements change rather than “guessing” how much you will need.

Given the increasing energy costs, it’s easy to overlook the running cost of a server once it has been purchased but even at a conservative electricity cost of £0.27 per kW, in our example this would give an annual power cost of £179.26. If we look at the running cost of older hardware, such as a Dell PowerEdge R410 this would be higher again with an annual running cost of £377.40.

If you were to use Microsoft Azure, you could potentially save money further by shutting down the server instance when the business is not operating, since they bill for processing time consumed (while the server is online). However, I personally prefer the fixed cost model offered by providers like Vultr, Linode etc but Azure does work very well for businesses across the globe.