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The cloud isn’t necessarily cheaper

One of our techs keeps a sticker in their office that reads “There’s no such thing as the cloud – it’s just someone else’s computer”. This phrase is particularly useful when thinking about IT budgets, and the shift from on-premise to cloud computing.

We receive inquiries from small businesses quite often asking if they can save some money if they eliminate on-premise servers and go completely cloud-based. Quite often, these projects may save on up-front project materials and labor, but recurring costs will often be the same, or perhaps even higher, with a cloud solution.

For example, many businesses have made the shift from having an on-premise Exchange email server to hosting email as part of a Microsoft 365 subscription. A traditional Exchange server would require the up-front purchase of a physical server (or the portion of a server’s hardware as a virtual machine on a physical host server), Exchange software licensing, an on-premise backup solution, and some form or an anti-spam solution. However, moving email service to the 365 cloud-hosted platform, the client still needs to provide a backup solution, anti-spam solution, and similar. Instead of the bulk of of costs being tied up initially with a large capital expense (CapEx) project, there are smaller up front costs, but higher operating expenses (OpEx) over time.

The same is true with file servers. As businesses move to server-less environments, all of the security management that a Windows Active Directory based environment provided – user administration, group membership and permissions, password policies, and so on – have to be moved to cloud management, and those come at additional per user per month fees. In addition, while existing backup solutions for on-premise environments can be removed from on-going agreements, they are replaced with cloud-to-cloud backup and recovery solutions, as data backup is still a business requirement.

There is no one-size-fits-all solution, and ultimately, this is a question that deserves a conversation and not an answer. Have questions about cloud vs. on-prem? Let’s talk.