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November 5, 2009 -- I get this question all the time. It's usually followed by "And, what kind." I always start by saying, "Well, it depends." Or, if they have already decided they must have a server, they tell me they are looking at an XYZ server they can get for $699 and isn't that great? Again, I tell them, it depends. So, I thought it might be helpful to explain the kinds of considerations a consultant has in thinking about servers for small businesses and nonprofit organizations.
First, do you need a server at all? If you are two or even three people and all you need to do is share files, you may not. The first thing you will need is a network. You may have one to share printers or to connect your computers for file sharing. If you do not have one, you can create one easily with a cheap network switch and some cables. Then, you can buy a NAS or Network Attached Storage device -- a hard disk that sits on your network -- that anyone on the network can use. This lets Sam and Sarah share a proposal or a report they are both working on. And, if you only have two or three people, this may be a good, low-cost solution. However, do look at what I have to say about backup, below.
So, why would you want a server? To start with, as you grow, managing users on your network and user access to data becomes a little trickier. Also, if you have one or more shared databases, as in an order entry system, shared management software or even the multi-user version of QuickBooks, a separate server becomes more useful. Quickbooks, for example, requires a running copy on the computer that holds the shared QuickBooks data. It could be on your partner's computer, but suppose she is doing some heavy-duty computing, as in graphics? A little slower? Keeping the data on the server isolates isolates it from what other people are doing.
Also, critical applications installed on the server can be accessed remotely, when you're at home (you never work from home, right?) or on the road. In addition, your consultant can perform some maintenance on the server remotely rather than making a more-expensive trip to your office.
But I only need a small server, why does it cost more than $699? Well, the first thing is that that server has no server software or operating system (OS). The most basic OS for Windows, Windows 2008 Foundation, costs $250 and supports up to 15 users. Besides that, when consultants think about a server, they think (a) about all the things your server needs to do and (b) very hard about the bad things that can happen to your server. And, that adds money. So, what are some of these concerns?
Disks crash. Apart from fans and switches, disks are the only mechanical devices in your server and they can fail -- sometimes dramatically! So, when I'm configuring even a small server, I set up what we call "mirrored" disks. This means there is a complete copy of all your data and programs on two disks. If one fails, the other soldiers on. This does require a second disk and a special, "RAID" disk controller to keep the disks in sync. This can add $200 or more to the cost plus possibly the cost of a second disk.
Provide backup power. Your server runs on electricity. I know a company where the electrician flipped a circuit breaker and the server crashed. The whole server had to be rebuilt and all the data restored. A uninterruptible power supply (UPS) makes sure that won't happen: If the lights go out, the battery kicks in and the UPS instructs the server to shut down "gracefully." This can add $250 or more.
You must back up your server. Even with both of these precautions, a server can still crash. Or, you can have a fire that devours your server. For this reason, consultants almost always insist on a good server backup system. I use what is called a disk-to-disk-to-disk backup. During the week, everything on the server is backed up to an external USB hard drive. Then, once a week, the contents of that hard drive are copied onto a hard disk cartridge and taken off the premises. This means, the most you can lose is a week's worth of work, but at least you will still be in business. This costs about $350-500, depending on the number and size of the hard disk cartridges.
I hope you can see that when consultants recommend something more than a basic server, they are not just trying to increase the price. For me, price does not matter in any case: I do not mark up products I resell and I'm happy to have a client purchase hardware and software themselves. Obviously unethical resellers can jack up prices unfairly. The protection against that is to ask exactly what each element of their proposed solution is for. If they can't explain it in language you can understand, say thanks, but no thanks and go to someone else. And, like going to the doctor, if you have doubts, get a second opinion.
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