Should SMBs Own Servers?

Considering the SAAS offerings out there, maybe not. At least, that's what one SAAS executive says, but he presents interesting figures.

Lamont Wood, Contributor

October 15, 2010

2 Min Read

Considering the SAAS offerings out there, maybe not. At least, that's what one SAAS executive says, but he presents interesting figures.In an earlier posting I had marveled that the server market is growing despite the spread of virtualization, which should let users do more with less. Others, as it turns out, wonder if SMBs should ever buy servers at all.

"All you need is a laptop and an Internet connection, and you can have software tools every bit as good as those used by major companies, and you don't need to hire IT consultants," says Jonathan McCormick. He points to SAAS versions of CRM, sales force management, accounting, OA, PBX, and other tools.

Of course, McCormick is not without bias, being the chief operating officer at Intermedia, a privately held New York-based firm that offers hosted services, and sees itself as the leader in hosted Microsoft Exchange services. For about $10 per month an office with as few as three people can get Exchange through the Internet, with their own domain names and full Outlook integration, he said.

Setting up a server with sufficient redundancy would cost $2,500, he said, and that is before you add the Exchange license, the instant messaging system, the security software, and the Blackberry interface, he noticed. Each system may end up requiring a separate server, and you'll want redundant systems, and an administrator.

But the host provider already has the things, requiring no capital expense from the SMB. he noted.

And there's the green angle-McCormick's experience is that a data center supporting 100,000 Exchange users consumes something like 83 kilowatts, or .83 watts per mailbox. But any on-premises stand-alone server will draw about 180 watts, so it would have to support more than 200 users to achieve the same efficiency-assuming there is no move to acquire more servers for Blackberry support, redundancy, etc. Each of those will consume another 180 watts, he noted.

Meanwhile, he expects to see his wattage-per-user fall dramatically in the foreseeable future as Intermedia applies virtualization.

Using consumer-oriented cloud-based e-mail like Google's Gmail is also equally green, but you won't get the full Outlook integration, or Intermedia's control panel, etc., he added.

Of course, not all SMBs are acquiring servers to perform generic functions that could as easily be supplied through SAAS. Doubtless many of those servers are being used for whatever unique thing it is that the SMB does for its customers. There are certain things that just cannot be replaced with a laptop and an Internet connection.

But it is something to think about.

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