In this article
For an SME with stable usage and a lot of data, renting a cloud server that does the same job as the on-premises server is usually the most expensive option over five years; the hybrid model costs almost the same as on-premises and adds resilience. The decision depends on three variables — total cost over 5 years, type of applications and quality of the internet connection — and this guide from DataRoad - IT Services and Consulting shows how to weigh them.
Quick conclusions
- No universal answer On-premises, cloud and hybrid each win in different scenarios.
- In the 5-year example On-premises and hybrid come to around €15,000; the equivalent server rented in the cloud exceeds €34,000.
- Cloud Wins on flexibility, rapid growth and dispersed teams.
- On-premises Wins with large data volumes, sector-specific applications and predictable usage.
- Deadline Microsoft support for Windows Server 2016 ends on 12 January 2027.
Three architectures, explained
- Server in the office Physical equipment in the comms room holding the company's files and applications, usually virtualised.
- Cloud The server is rented in a data centre (Microsoft Azure, for example) and paid monthly; or it ceases to exist, when files and applications move to SharePoint or to subscription-based sector software.
- Hybrid What needs to be close stays in the office, the rest goes to the cloud, and backups exist on both sides.
What virtualising means: running several isolated servers inside a single physical machine. Instead of one box for files, another for invoicing and another for the domain, there is just one — simpler to back up, move and restore. If the machine fails, the virtual server can start up on other hardware or in the cloud.
Example of total cost over 5 years
Example — a 30-workstation company, a file server with around 2 TB and one sector-specific management application. Illustrative, rounded figures, excluding VAT; electricity at €0.20/kWh; average consumption of 250 W for the on-premises server and 150 W for hybrid (a smaller machine). Technical management is left out because it is the same for all three options, and the Microsoft 365 licences already exist. These are not DataRoad prices or proposals: they serve to show what should go into the calculation.
| Item (5 years) | On-premises server | Server rented in the cloud | Hybrid |
|---|---|---|---|
| Hardware with 5-year warranty | €6,000 | — | €4,000 |
| Server licences and user access licences | €2,500 | Included in rental | €1,800 |
| Server and 2 TB rental (€450/month) | — | €27,000 | — |
| Files in SharePoint/OneDrive | — | — | Included in Microsoft 365 (within plan limits) |
| UPS and battery replacement | €1,200 | — | €1,000 |
| Energy (2,190 kWh/year on-premises; 1,314 kWh/year hybrid) | €2,190 | — | €1,314 |
| Local backup and off-site copy | €3,000 | €3,600 | €4,200 |
| Egress traffic and additional cloud services | — | €1,200 | — |
| Second internet connection | — | €3,000 | €3,000 |
| Total over 5 years (Example) | €14,890 | €34,800 | €15,314 |
What the table reveals
- Replicating the on-premises server in the cloud is expensive — you pay every month for capacity that is used constantly.
- The cloud has hidden costs — egress traffic, cloud backups, additional services and a more robust internet connection, without which nobody can work.
- Hybrid ties with on-premises — but it moves out of the office what does not need to be there and brings a second internet connection that protects the whole company.
With other assumptions, the numbers change. That is why the calculation should be done with your company's real data.
Which model wins in each scenario
| Scenario | Most suitable model | Reason |
|---|---|---|
| Heavy files (imaging, design, video) used in the office | On-premises | Internal network speed and storage cost |
| Sector application that only runs when installed locally | On-premises or hybrid | Avoids slowness and incompatibilities |
| Teams in several locations or working remotely | Cloud or hybrid | Identical access from anywhere |
| Rapid or uncertain growth | Cloud | Capacity adjusted without buying hardware |
| Weak internet or no backup connection | On-premises | The cloud depends on the connection |
| Office without a comms room, UPS or air conditioning | Cloud or hybrid | Removes physical risk from the building |
| 30 to 100 workstations, files and one management application, stable usage | Hybrid | Cost close to on-premises, with more resilience |
The date that forces a decision: end of Windows Server support
Many companies only review their servers when one breaks down. There are better moments. According to Microsoft, extended support for Windows Server 2016 ends on 12 January 2027 and for Windows Server 2019 on 9 January 2029. After that there are no more security updates — a serious exposure and, for companies within the scope of the NIS2 directive, hard to justify.
Anyone still running 2016 servers needs to decide in the coming months between replacing, virtualising or migrating. It is an item to include in planning the 2027 IT budget.
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Talk to DataRoad. We assess your operation and propose the right plan.
Hybrid in practice: one company in three cities
Velv by OnRising, a nearshore software development company with offices in Porto, Lisbon and Rio de Janeiro, has around 200 workstations covered by an IT Unlimited contract with DataRoad. The scope includes firewall, wireless network, printers, servers and connectivity, with support for servers, cloud and critical connections.
Each component lives where it works best, and a single team is accountable for the whole.
Rules for a smooth transition
- Internet first — a second, independent connection is a precondition for any move to the cloud. See our guide to internet speed and redundancy for businesses.
- In phases — start with what hurts least: email, then files, and finally applications.
- Pilot — two weeks with real users before moving everyone.
- Way back — keep the option to roll back and validate backups before and after each phase.
If the team works mostly outside the office, the computers themselves can move to the cloud. We analysed that scenario in Windows 365: when a cloud PC pays off.
Frequently asked questions
Is the cloud always cheaper than a server in the office?
No. With stable usage and a lot of data, a server rented in the cloud tends to cost more over 5 years. The cloud pays off through flexibility, access from anywhere and eliminating physical risk at the office.
What does a hybrid model involve?
What needs proximity, such as a sector application or very heavy files, stays in the office; the rest, such as email and shared documents, moves to the cloud. Backups exist on both sides.
What is the lifespan of a server?
Around 5 years, in line with the manufacturer's warranty. The end of operating system support — such as Windows Server 2016 in January 2027 — can bring replacement forward.
Can the current server be virtualised?
Often, yes, if the hardware is under warranty and has the capacity. Virtualising simplifies backups and allows the server to be moved later to another machine or to the cloud without reinstalling everything.
How DataRoad manages your infrastructure
We design, install and manage servers and virtualisation — in the office, in the cloud or in a hybrid model — always with managed backups and restore tests. On the IT Unlimited Premium plan on-site support is unlimited: hardware replacement, comms-room work and migrations with no call-out charges billed separately. Annual contract with automatic renewal, 60 days' notice and no lock-in.
Next step: your 5-year calculation in 10 working days
We survey your servers, data and applications, calculate the 5-year cost of the three options with your figures and deliver a written recommendation, with a migration plan where justified. No-obligation proposal.
More than 10 workstations · support contract · remote, on-site and telephone support
