Cost of Server Comparison: On-Premises vs Cloud

The cost of servers on-premises and in the cloud varies depending on server specifications. Dedicated servers may require higher costs upfront. On the other hand, cloud servers from vendors such as Amazon Web Services (AWS) and Azure can be provisioned on-demand, meaning you can start out with basic servers and ramp them up later. Total cost of ownership (TCO) analysis and your own usage requirements may help determine which server is best for your use case.

On-Premises Servers

On-premises, or dedicated, servers are physical hardware that your team manages and maintains on-site. The location can be your own, or a datacenter from a third-party vendor but with your own team deployed on-site and responsible for maintaining the equipment.

Typically, on-premises servers are more expensive than other types of computer hardware. While it is estimated that the typical on-premises server costs between $1,000 and $2,500, that could go higher if you require more powerful servers.

You must also ensure that server specifications are enough to meet future demand. Otherwise, you may need to acquire more powerful servers earlier than necessary. If you need to upgrade, the process is also not that trivial and may require downtime.

Other factors that can drive up the costs of on-premises servers are replacement parts, redundant hardware requirements for high availability, electric power, and cooling requirements, and software licenses. On-premises servers also require trained personnel.

On-premises servers are more secure if you have highly trained computer-security teams keeping watch over them. Since they do not require an internet connection, they can also be more reliable than cloud servers.

Cloud Servers

Cloud servers are virtual servers hosted in some remote location, with computing resources that are typically shared between you and other customers of the service vendor.

Cloud servers cost less when you get a server just powerful enough to suit your current needs. If you require more powerful servers later, you can choose to upgrade and pay a higher monthly fee. While economies of scale allow providers to charge reasonable fees at the start, as your demand grows, you may find that your servers also cost more.

In terms of scalability, you can add more computing resources simply, with an often seamless transition to higher specification servers that do not require any downtime.

To protect their reputation and ensure that they do not lose their clientele to competitors, most providers commit to keeping their infrastructures secure. Thus, while your own people may not oversee security, you can be assured that cloud servers are secure enough for your needs.

Cloud servers require access to an internet connection. In the event of an internet outage, your access may be limited.

Which to Consider: On-Premises vs. Cloud Servers

As we mentioned previously, the cost of a server can be as high as $2,500 for an on-premises server and $400 for a cloud server. While the cost advantage seems overwhelmingly in favor of cloud servers, it might happen that an on-premises server may be more ideal based on your requirements. Thus, you must first ask the following questions to help determine the best server for you.

When is the server needed? If you need the server immediately, a cloud server is your best bet.
Are you required to comply with certain government regulations? If your business is subject to stringent compliance requirements, a dedicated server might be best for you.
Do you have specific configuration, management, and support concerns? A dedicated server is ideal for stable workloads. However, for workloads that need constant fine-tuning, a cloud server is better.
How much is the server’s expected workload? High workloads may mean higher cloud server costs eventually. It might be cheaper to get a dedicated server in this case.
How consistent are the workload demands? Related to the above question, in the case of consistently high demand, a dedicated server remains the best option. However, if your workloads rarely hit peak demands, you may want to shift to a cloud server.
Do you foresee upgrades due to workload demands? If your anticipated higher workloads can be met only with specific server requirements, a dedicated server would be best, unless you find a cloud services provider who can meet your specific requirements.
Can you afford higher upfront costs, or do you prefer spreading expenses over time? If you can spend money upfront and your requirements point to an on-premises server, then go for that option. Otherwise, a cloud server may be better, given the lower capital outlay.

Cost of Server Comparison: On-Premises vs Cloud Servers

Now that you have asked the above questions, the cost comparison between on-premises and cloud servers is next. This is because, while one type of server may be a better fit for your requirements, a TCO analysis between the two will help you determine the best option in terms of overall costs.

Consider the following when comparing the cost of a server:

Infrastructure and maintenance costs: On-premises servers require investment not only in IT infrastructure but also in physical infrastructure, including office space, insurance, and electricity and cooling equipment.
IT maintenance costs: Computing, memory, and storage upgrades come to mind when it comes to on-premises servers, as well as hardware refreshes every few years or so.
Network traffic costs: This can be significant for on-premises servers but more affordable on the cloud.
Energy costs: Aside from the energy equipment requirements, energy costs may be higher on-premises since cloud service providers often get bulk discounts for energy use.
Labor costs: Significant investment in personnel and training is required for on-premises servers, but not so much for cloud servers.

Parallels RAS: Cost-Effective On-Premises and Cloud Server Deployment

Parallels® Remote Application Server (RAS) is a cost-effective, easy-to-install, and highly secure virtual desktop infrastructure (VDI) solution. Parallels RAS streamlines both on-premises and cloud server deployments using a centralized management tool, and its auto-provisioning capabilities enable your IT infrastructure to scale on demand. It also is compatible with a wide array of cross-platform clients for your end-users.

Parallels RAS supports the deployment of your virtual applications and desktops to your own on-premises servers and servers on the public cloud. It also supports deployment to other forms of clouds, such as hybrid clouds and hyperconverged infrastructures.

Check out how you can use Parallels RAS for your on-premises and cloud server deployments.

Download the Trial