Server in the office, virtualized or in the cloud? The account for 5 years

8 min read · DataRoad

Servers: virtualize or move to the cloud? The right choice between on-premises servers, virtualization, and the cloud depends on three things: how much it costs at the end of five years, which applications the company uses, and how good the internet connection is. The cloud is the trendy answer, but it is rarely the cheapest when the volume of data is large and usage is stable. The on-premises server is the traditional answer, but it requires energy, off-site backups, and periodic replacement. In most SMEs, the best answer is in the middle.

Below is an account from 5 years ago with all the details available at a glance.

The three options, in simple language

• Server in the office: a physical device in the technical room with the company's files and applications. Usually virtualized.
• Cloud: the server is rented out to a data center of a provider (Microsoft Azure, for example), paid for on a monthly basis. Or it disappears completely if the files and applications are moved to services like SharePoint or industry-specific software on a subscription basis.
• Hybrid: What needs to be close is in the office; the rest goes to the cloud; and the backups are on both sides.

The cost over 5 years: an example with the items in sight

Example — company with 30 workstations, a file server with about 2 TB of data and an industry management application. Assumptions: illustrative and rounded values, excluding VAT; electricity at €0.20/kWh; local server with an average consumption of 250 W (150 W in the hybrid, as it is smaller); technical management is not included in the bill because it is common to all three options; Microsoft 365 licenses already exist. DataRoad is neither a price nor a proposal — they serve to illustrate what the items cost.

Three conclusions that this example makes visible:

1. Renting a server in the cloud to do exactly the same thing as the local server is almost always the most expensive option. 5 years — payment is made every month for capacity that is used in a stable manner.
2. A cloud brings costs that do not appear in the initial proposal: outbound traffic, backups in the cloud, additional services and a more robust internet, because without it no one works.
3. The hybrid costs practically the same as the local server, But it removes anything that doesn't need to be there from the office and adds a second internet connection that protects the entire company.

With other assumptions the result changes — and that is why the account must be made with your own numbers.

When every option wins

The deadline that you can decide for yourself: the end of Windows Server support

Many SMEs only overhaul their infrastructure when the server fails. There is a better time to do it. According to Microsoft, extended support for Windows Server 2016 ends on January 12, 2027; the one for Windows Server 2019, on January 9, 2029. After those dates, there will be no more security updates — an exposed server is vulnerable to attacks, and for companies covered by NIS2, A fragility that is difficult to justify.

If your server is still running 2016, the decision “to replace, virtualize or migrate” must be made in the coming months. It’s worth including it in the IT budget for 2027.

A real case: servers and cloud in a company in three cities

Our Velv by OnRising, a nearshore software development company with offices in Porto, Lisbon and Rio de Janeiro, has about 200 jobs covered by an IT Unlimited contract with DataRoad. The contract includes firewall, wireless network, printers, servers and connectivity, with support for servers, cloud and critical connections.

It is the hybrid model in practice: each piece is managed where it works best, with a single team responsible for the whole.

If you decide to change: four rules

1. Strengthen the internet first. A second independent connection is a prerequisite for any step towards the cloud — see the guide on Internet for businesses and redundancy.
2. Migrate in phases, Starting with what hurts the least: email, then files, and finally applications.
3. Create a two-week pilot with real users before everyone changed.
4. Keep a way back and confirm the backups before and after each phase.

If the team works mostly outside the office, it might make sense to also bring the computers themselves into the cloud: we’ve analyzed this scenario in PC in the cloud (Windows 365): what it's worth.

How DataRoad helps

We design, install and manage servers and virtualisation — in the office, in the cloud or in a hybrid model —, always with managed backups and replacement tests. In IT Unlimited Premium, On-site assistance is included: equipment replacement, technical room interventions, and migrations do not incur any additional charges. Annual contract, automatic renewal, 60 days’ notice, and no lock-in period.

Frequently Asked Questions

Is a cloud always cheaper than a server in the office?

No. For stable use and a lot of data, renting a server in the cloud usually costs more over 5 years. The cloud is mainly beneficial for flexibility, access from anywhere, and removing the physical risk of the office.

What is a hybrid model?

It’s keeping what needs to be close to the office, like industry applications or very heavy files, and moving the rest to the cloud, like email and shared documents. Backups are kept on both sides.

How often is a server replaced?

The usual cycle is about 5 years, aligned with the manufacturer’s warranty. The end of operating system support, such as Windows Server 2016 in January 2027, may anticipate this decision.

Can I virtualize the server I already have?

Often, yes, if the equipment still has warranty and capacity. Virtualization makes backups easier and allows you to later move the server to another device or to the cloud without having to reinstall everything.

It takes 5 years to build its infrastructure in 10 working days

We take down your servers, data, and applications; we calculate the costs for 5 years using your figures for the three options and deliver a written recommendation, with a migration plan if it makes sense. For companies with more than 10 locations · contract of assistance · remote, on-site, and telephone support.

Sources

• Microsoft Learn — Windows Server 2016 lifecycle
• Microsoft Learn — Windows Server 2019 lifecycle