--- title: "Servers: on-premises, cloud or hybrid? The five-year maths" description: "On-premises, cloud or hybrid servers: five-year cost line by line, when each pays off and the end of Windows Server 2016. No-obligation proposal." language: en url: https://www.dataroad-it.com/en/on-premises-cloud-hybrid-server-5-year-cost/ source: https://www.dataroad-it.com/en/on-premises-cloud-hybrid-server-5-year-cost/ publisher: DataRoad IT (DataRoad - IT Services and Consulting), Portugal --- > On-premises, cloud or hybrid servers: five-year cost line by line, when each pays off and the end of Windows Server 2016. No-obligation proposal. # Servers: on-premises, cloud or hybrid? The five-year maths At a glance For decision-makers short on time. - 01 In the 30-workstation example, on-premises and hybrid cost about €15k over 5 years; cloud tops €34k. - 02 Cloud pays off with fast growth and dispersed teams; on-premises with lots of data and stable use. - 03 Support for Windows Server 2016 ends on 12 January 2027. - 04 DataRoad calculates all three options with your data in 10 working days. ### In this article **Choosing the wrong server infrastructure can cost more than nineteen thousand euros over five years.** That is the difference, in the example below, between keeping the server in the office and replicating it exactly on a rented server in the cloud. For an SME with stable usage and a lot of data, the hybrid model comes in at practically the price of on-premises and adds resilience. In this guide, DataRoad - IT Services and Consulting shows how to decide between on-premises, cloud or hybrid infrastructure using three criteria: five-year total cost, type of applications and quality of the internet connection. ## Short answer for decision-makers - **There is no absolute winner** Each model wins in a different context. - **Figures from the example** On-premises and hybrid come to around €15,000 over five years; the same capacity rented in the cloud exceeds €34,000. - **Cloud wins** When the company grows fast, changes a lot or has dispersed teams. - **On-premises wins** With lots of data, installed sector-specific software and predictable usage. - **There is a deadline** 12 January 2027, the end of Microsoft support for Windows Server 2016. ## Which server infrastructure options are there? - **On-premises** A physical machine in the technical room, usually virtualised, that stores files and runs the company's applications. - **Cloud** Two variants: renting a server in a data centre (for example, Microsoft Azure) on a monthly fee, or doing away with the server, moving files to SharePoint and applications to sector-specific software by subscription. - **Hybrid** Only what needs proximity stays in the office; the rest moves to the cloud, with backups on both sides. **Virtualisation, in one sentence:** a single physical machine hosts several servers isolated from each other. Instead of one box for files, another for billing and another for the domain, there is just one, easier to copy, move and recover. If the hardware fails, the virtual server starts on another machine or in the cloud. ## How much does each model cost over five years? *Reference scenario*: 30 workstations, around 2 TB of files and one sector-specific management application. Rounded, illustrative figures, excluding VAT. Electricity at €0.20/kWh; the on-premises server draws an average of 250 W and the smaller hybrid one 150 W. We have left out technical management, which is the same in all three options, and Microsoft 365 licences, which the company already has. These figures are not DataRoad prices or proposals; they simply show which items go into the calculation. | Cost over 5 years | On-premises | Hybrid | Cloud (rented server) | | --- | --- | --- | --- | | Hardware, 5-year warranty | €6,000 | €4,000 | - | | Server licensing and CALs | €2,500 | €1,800 | Included in the rental | | Server and 2 TB rented at €450/month | - | - | €27,000 | | Documents in SharePoint/OneDrive | - | Covered by Microsoft 365, within the plan's limits | - | | UPS with battery replacement | €1,200 | €1,000 | - | | Electricity (on-premises 2,190 kWh/year; hybrid 1,314 kWh/year) | €2,190 | €1,314 | - | | Backups and off-site replica | €3,000 | €4,200 | €3,600 | | Data egress and extra cloud services | - | - | €1,200 | | Backup internet line | - | €3,000 | €3,000 | | **Scenario total** | **€14,890** | **€15,314** | **€34,800** | ### Three takeaways from the table - **Copying the server to the cloud is the most expensive option**: you pay month after month for capacity used continuously. - **The cloud bill does not stop at the rental**: data egress, backups, extra services and a redundant internet connection, without which work stops. - **Hybrid and on-premises are almost level**: but hybrid takes out of the office what does not need to be there and brings a backup line that protects the whole operation. Different assumptions give different totals. The right calculation is the one made with your company's data. ## Which should you choose for your type of operation? | Situation | Recommended option | Why | | --- | --- | --- | | Images, design or video worked on in the office | On-premises | Fast internal network and cheap storage | | Sector-specific software that only works installed | On-premises or hybrid | No slowness or compatibility problems | | Remote working or several offices | Cloud or hybrid | The same experience anywhere | | Rapid or unpredictable growth | Cloud | Scales without buying hardware | | Weak internet or no backup line | On-premises | The cloud only works with a good connection | | No technical room, UPS or air conditioning | Cloud or hybrid | Removes the building's physical risk | | Between 30 and 100 workstations, stable usage, an ERP and shared files | Hybrid | Price close to on-premises, more resilience | ## Why does 2027 force a decision now? Waiting for the server to fail is the worst possible timetable. According to Microsoft, **Windows Server 2016 loses extended support on 12 January 2027**; Windows Server 2019 loses it on 9 January 2029. Without security updates, the risk grows every day and, for companies subject to [NIS2](https://www.dataroad-it.com/en/nis2-compliance-portugal/), becomes hard to defend. Anyone still running 2016 has only a few months to choose between replacing, virtualising or migrating. Include that decision in your [2027 IT budget](https://www.dataroad-it.com/en/it-budget-2027-managed-services-fixed-cost/). ## Real case: hybrid infrastructure in three cities [Velv by OnRising](https://www.dataroad-it.com/en/velv-onrising-managed-it-200-workstations/) develops software on a nearshore basis from Porto, Lisbon and Rio de Janeiro. Its roughly 200 workstations are under a DataRoad IT Unlimited contract covering servers, connectivity, firewall, printers and wireless network, including support for critical connections, the cloud and servers. Each piece sits where it delivers most. A single team answers for all of them. ## How do you migrate without stopping the business? - **Secure the connection**: without a second independent line, no step to the cloud is safe. More detail in our guide to [fast, redundant business internet](https://www.dataroad-it.com/en/business-internet-upload-redundancy-sla/). - **Move in stages**: email first, then files, applications last. - **Test with real people**: a two-week pilot before moving the entire company. - **Have a fallback plan**: be able to roll back and validate backups before and after each stage. With teams mostly outside the office, even the PCs themselves can move to the cloud. We ran the numbers in [Windows 365 and the cloud PC for businesses](https://www.dataroad-it.com/en/windows-365-business-cloud-pc-costs/). ## Frequently asked questions ### Is the cloud always cheaper than an on-premises server? No. With stable usage and lots of data, renting the server in the cloud tends to cost more over five years. It pays off for flexibility, access from anywhere and removing physical risk from the office. ### What is hybrid infrastructure in practice? It means keeping in the office only what needs proximity, such as sector-specific software or very large files, and moving the rest to the cloud, such as email and shared documents. There are backups on both sides. ### After how long should a server be replaced? After around five years, in line with the manufacturer's warranty. It can be sooner if the operating system loses support, as with Windows Server 2016, in January 2027. ### Can our existing server be virtualised? In many cases yes, provided it has warranty and capacity. Virtualisation makes backups easier and lets you move the server later to another machine or to the cloud without reinstalling. ## What DataRoad takes on in server management We design, install and manage [servers and virtualisation platforms](https://www.dataroad-it.com/en/managed-servers-virtualisation-portugal/) in the office, in the cloud or hybrid, always backed by [managed backup](https://www.dataroad-it.com/en/managed-backup-services-portugal/) with restore tests. With [IT Unlimited Premium](https://www.dataroad-it.com/en/it-unlimited-premium-on-site-support/) on-site support is unlimited: hardware replacements, work in the technical room and migrations, with travel included. A one-year contract that renews automatically, with no lock-in. ## Want the calculation done with your numbers? In 10 working days we inventory your servers, data and applications, calculate the five-year cost of each option and deliver our recommendation in writing, with a migration plan where justified. Request a no-commitment proposal. **More than 10 workstations · support contract · remote, on-site and phone support.** Call +351 211 459 950 * or write to sales@dataroad.pt. **Call to a Portuguese landline.* ## Sources - [Microsoft Learn: Windows Server 2016 lifecycle](https://learn.microsoft.com/en-us/lifecycle/products/windows-server-2016) - [Microsoft Learn: Windows Server 2019 lifecycle](https://learn.microsoft.com/en-us/lifecycle/products/windows-server-2019) Chosen by respected and international companies ★★★★★ 5,0 · 52 Google reviews ★★★★★ 5,0 · 52 Google reviews DataRoad ## Related articles [Managed IT and cybersecurityTeams on the move: securing laptops, phones and public Wi-FiThe real travel risk is an unencrypted lost laptop, not hotel Wi-Fi. 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