Staying on top of the latest technological developments is important for most businesses. Regularly upgrading older equipment and adding new devices has been a normal part of business for years, but cloud computing is set to change the status quo. Businesses are starting to realize that the cloud can offer cost-effective alternatives to costly server upgrades. A business should first determine the future need for storage and other resources and the cost to fill that need coupled with the expected lifecycle of purchased equipment. Then the company should determine the amount of available resources that will be used during normal and peak usage and take into consideration what types of services will be provided by the hardware. After all of these aspects have been considered, the decision for purchasing dedicated hardware versus a cloud solution can be made confidently.
What Kind of Growth Is Expected?

Making a dedicated hardware purchase locks a company into that hardware, meaning that if they need to expand more they will have to purchase additional hardware to compensate. Cloud hosts that provide online file storage, web hosting, data processing and Software as a Service have the ability to scale individual clients’ resources to match their current and future needs. When a company expects rapid growth in usage, they can reconfigure their services to match their projected needs.

How Much Will It Cost?

The cost of regular hardware upgrades can be prohibitive, particularly to smaller businesses. The efficacy of purchasing new hardware versus what is essentially renting the necessary resources from a cloud provider can be difficult to determine without proper investigation. A cloud service provides its clients with a recurring monthly bill while the cost of dedicated, in-house equipment is spread out among several areas. The cost of the physical equipment must be taken into consideration, but it doesn’t end there. The time and money spent managing the hardware, the resources expended on providing adequate space for servers and the cost of powering the equipment can add up and should be taken into consideration when deciding between an upgrade and a shift to the cloud.

How Long Will It Be Useful?

Dedicated servers require upgrades or replacements every few years to keep up with a company’s growing demands. When the time comes to replace equipment a company not only has to pay for the new hardware, but also determine what to do with their old hardware. Sometimes the cost of the new equipment can be offset by selling the old or the company can gain tax benefits from donating certain parts to non-profit organizations, but the up-front cost remains high. By switching to a cloud provider, however, a company gains the benefit of nearly immediate upgrades while only having to pay a monthly fee. Furthermore, there is no down time or low availability during a cloud upgrade, which helps keep productivity high.

How Often Will It Be Used?

Successful businesses tend to upgrade and expand their IT equipment when they perceive an upcoming need rather than when they have reached their limits. Every company needs to have room to grow with their current server solution and must have the resources available to deal with usage spikes. When purchasing dedicated equipment, this can lead to purchasing equipment that can meet these peak needs, but that spend most of their time idling. When a company makes use of a cloud computing environment, however, they can easily scale back their resources during off-peak times and requisition more power when required, eliminating the underutilization of their servers.

What Services Will It Host?

Some services are best kept in-house, whether for low latency or security. Sensitive customer data, for instance, should remain internal and be closely guarded. For other uses, such as app development or file synchronization, a cloud solution will provide flexibility and accessibility.