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In-House Server? Cloud Services? Pros and Cons for Your Business

February 21, 2017 in IT Managed Services, Hardware and Software
Finding balance in cost, features, and risk-avoidance is a challenge that every business faces with their technology as they grow.

Since businesses rely so heavily on computers and other IT infrastructure to meet their goals, this is a critical aspect of your business that calls for sound IT consulting.

The key is to strike a reliable and cost-justified balance between the 3 core aspects of business IT infrastructure: 

In-house services and infrastructure

On-site servers, backups, computers, network equipment, and your IT service provider

3rd party services and infrastructure

Servers & backups in 3rd party control (often referred to as “The Cloud”), your internet service provider, and your IT service provider)


Antivirus, anti-spam, password management, staff training, and network security to stop cyber crooks on as many fronts as possible

It is important to know what the risks associated with each of these 3 categories are, and how much skin your business has in the game to hedge your bets accordingly. You only want to make bets that you can afford to lose and you will get what you pay for in all 3 of these areas. If it is cheap now, odds are you will pay for it in another way later.

The first things you need to determine are:

How much can you afford to lose?

How much do you need to spend?

What mix of services are needed to achieve the target risk level?

Whether you purchase or lease in-house IT infrastructure, you will fully own both its benefits and any possible problems that may arise. It is important to consider:

How long this equipment is expected to function?

What maintenance will be required to meet that lifespan?

For business critical systems, you must have the right expertise in place to manage it, and single points of failure should be avoided like the plague. In the case of a serious mishap, make sure that multiple people can fix issues that arise, and have working on-site and off-site backups in place along with adequate security.


Benefits of in-house infrastructure and server:

  • Having independence and full control over your business data.
  • Lower long term cost of ownership.
  • Access to specific business solutions that work best on a fast internal network and a server.
  • With more than 5 users, you can centrally manage your network, security policies, and passwords.
  • Cutting cost if cloud-capable internet service is very expensive or simply not available in your area.

Downsides of in-house services:

  • Owning any issues and the negative effect on your business.
  • The ability to cut corners in important areas.
  • Affordable solutions can have a hidden cost: Downtime!

3rd party (cloud) services and infrastructure are inevitable in today’s connected world. You typically have less control over 3rd party services and infrastructure than in-house set ups. Because of this, it is important that the services are guaranteed to perform at an acceptable level and are dependable. This class of service will offer you greater flexibility to grow your business, and removes some of the variables related to the ongoing cost for IT services or infrastructure.

Benefits of 3rd party "cloud” services:

  • Predictable monthly recurring expenses.
  • Ease of adding capacity for your business to grow.
  • “Renting” a small piece of a highly reliable system that would be too expensive to replicate on your own.
  • Issues you may experience with the provider may be their responsibility to resolve.
  • In the case of backups, you don’t have all of your eggs in one basket.

Downsides of 3rd party "cloud" services:

  • Giving up control of your data.
  • Being at the provider’s mercy to fix problems that arise.
  • Higher long term cost of ownership: they must make profit as a business
  • Worse performance: you are sharing a server with their other customers, and the service may perform worse than an in-house system at times
  • Potential data loss if there is a mishap, or worse stolen data if they ever got hacked due to being a bigger target.
  • The need for higher speed internet for a cloud based service to work smoothly for the entire office.

In summary, both smaller and larger organizations stand to benefit from both in-house and 3rd party IT infrastructure, so a hybrid mix of both is generally a good idea. Ultimately a discussion should take place to identify the objectives, strategy, and risk tolerance of your organization to determine what specific solution would work best.

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Broadly speaking, small organizations may benefit from leaning towards 3rd party services, while medium to large organizations may benefit from leaning towards in-house infrastructure with a number of 3rd party services and infrastructure in the mix. Regardless of whether your users remain on the internal network or frequently venture onto the internet to get their work done, it is crucial that you equip your staff with the information and security tools to keep their computers, accounts, and by extension your, business secure in the digital age.

Benno Van Waeyenberg

Benno Van Waeyenberg

Born in Belgium, Benno grew up travelling the world with his parents and brother in a mobile home until they finally settled in Mexico. He got into computers as a hobby when he was 14 years old by hanging out with a retired British engineer who was really into computers as well. He started fixing computers for a fee starting at age 15 and opened a dedicated shop as soon as he was old enough to sign a lease the day after his 18th birthday.

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