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The Hidden Costs of On-Premise Servers - Should You Consider Cloud Computing?

picture of an on premise server

When comparing on-premise and cloud-based server options, it's crucial to ensure you're making an accurate comparison.

Similar to any purchase, it's essential to thoroughly understand all the details, including hidden costs, before making such a significant decision.It's common for business leaders to solely focus on sticker prices and assume that cloud-based solutions are considerably more expensive, potentially making them seem unattainable for their organization.

After reading this article, you will gain a comprehensive understanding of all the cost factors, both apparent and hidden, that should be taken into account when making this crucial decision. Within this article, we will elaborate on the often-overlooked expenses that may not be immediately apparent when you're assessing your server options. Armed with this information, you'll be in a better position to make the most suitable server decision for your organization.

What is an On-Premise Server?

As the term "server" is frequently employed to describe physical or virtual machines, or even software simulating server functions, it's important to clarify that in this article, our focus is exclusively on physical servers. More precisely, we are discussing servers located within your organization's physical premises or building.

These specific servers fall under the category known as on-premise (often abbreviated as "on-prem") servers.

Why Are Hidden Costs Important?

When you're in the process of deciding between leasing and buying a vehicle, it's essential to have a complete understanding of all the concealed expenses, right? Simply comparing the financing terms might not suffice. You could glance at the sticker price and reasonably assume that your lease payment encompasses all your costs.

On paper, leasing might appear to be the more economical choice. However, have you considered what happens if you surpass your monthly mileage allowance? Are there penalties for ending the lease prematurely? And how about wear and tear?

While the extra mileage charge may seem insignificant (e.g., 20 cents per mile), these fees can accumulate rapidly for those who aren't paying close attention.

What Are the Hidden Costs of On-Premise Servers?

Regardless of your choice between server options, there will always be associated costs. In addition to the initial capital investment, there are concealed operational expenses tied to on-premise servers that are frequently overlooked when evaluating server expenses. Being aware of these factors upfront will help ensure you're prepared and can make a well-informed technology decision based on a comprehensive cost comparison.

Downtime Often, organizations fail to proactively plan for server replacement until it fails. At that point, without a backup server in place, you're left with non-functional equipment and unexpected business interruptions.


Running an on-premise server requires maintaining a backup server in case of primary server issues. This means you're incurring electricity costs for both servers to operate continuously, effectively doubling your electricity expenses.


Consider the monetary value of the square footage your business occupies. When managing an on-premise server (possibly with a backup), factor in the cost of the space required to house them.


If your on-premise servers store sensitive data, account for the expense of safeguarding that information. Whether it involves investing in security systems with badge-reader access, cameras, or a combination of both, these costs should be taken into consideration.


Maintaining and installing software will necessitate an administrator and a suitably sized internal or external IT team. Regularly updating software is crucial to keeping your server protected against the latest cyber threats, as cyber threats continually evolve.


As your business expands and new technologies emerge, your server's demands will grow as well. What was sufficient server capacity last year may fall short in two years. With the typical server lifespan estimated at three to five years, you might not be ready to invest in a new on-premise server after only two years.

Where Do We Go From Here?

Having read this article, you now have a clear understanding of what an on-premise server entails and the hidden costs associated with it. Equipped with this knowledge, you are better prepared to conduct a thorough comparison of your server options.

At MapleTronics, our commitment is to provide business leaders with honest and comprehensive technology information to facilitate critical IT decisions. We understand that our solution may not always be the best fit for your business needs. Instead of persuading you to work with us, our focus is on offering unbiased information that empowers you to discover the most effective technology solutions for your unique situation.So, where do you go from here? Armed with insights into the concealed expenses linked to on-premise server solutions, you can now make an informed decision regarding the server option that suits you best.

At this point, you might be curious about other server alternatives. Consider exploring the pros and cons of cloud computing to determine if it aligns with your requirements. If you need professional help deciding which server option is best for you reach out to a member of our expert technology team today and we'll be glad to help guide you.


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