Attention Entrepreneurs: Should You Rent Cloud Servers or Own Your Infrastructure? Let’s Break It Down.
In today’s digital age, deciding whether to rent servers in the cloud or to invest in your own infrastructure is a critical decision for any business. Both options come with common costs, including:
- System Costs: This covers all applications and their components.
- Digital Marketing Expenses: The costs associated with promoting the products you’re selling.
- Administrator Costs: The salary or fees for a skilled technician to manage your systems.
- Internet Expenses: The cost of maintaining a stable and fast internet connection.
- Operational Overheads: Miscellaneous expenses, including utilities and rent.
Now, if you’ve read our book, you’ll know that our advice is clear: whether you’re launching a new venture or scaling an established one, owning your infrastructure can be more cost-effective in the long run.
Surprised? In a world where cloud services are heavily marketed and adopted by industry giants, this may seem counterintuitive. However, there are several compelling reasons why owning your resources is a smarter choice for emerging businesses.
Argument No. 1: Control Over Resource Consumption
While cloud services allow you to pay only for what you use, unexpected spikes—often caused by cyberattacks—can lead to significant, unanticipated costs. To mitigate these risks, you’ll need a skilled administrator to manage and secure your environment. However, if your site is attacked and resources are consumed by malicious bots, you’ll be on the hook for those extra costs. There are countless stories of businesses facing these issues.
Argument No. 2: Stability Amid Economic Fluctuations
Inflation is an ever-present concern, impacting both cloud and on-premises hardware costs. If your sales dip during an economic downturn, maintaining cloud subscriptions can become financially unsustainable, potentially leading to your business’s collapse. In contrast, owning your hardware—no matter how modest—ensures that your business can continue to operate even during tough times. As long as you maintain your site, you can keep selling, no matter the volume.
Argument No. 3: Flexibility and Asset Retention
Accurately estimating your resource needs is a challenging task. Often, businesses overestimate and end up paying for more than they need, especially in the cloud. If your sales decrease, the money you’ve spent on excess resources is gone. However, if you own your hardware, it remains your asset. You can sell it, repurpose it, or use it for other applications as needed.
The Triangle of Independence
Maintaining independence is crucial for ensuring your long-term presence in the market. The longer your business endures, the stronger your brand becomes. Over time, businesses accrue value, and when the time comes to sell, a well-established brand is worth much more.
The formula for independence and sustainability is simple:
Ground + Hardware + Energy = Digital Real Estate
- Ground: Invest in a small space where you can house your physical infrastructure. If possible, buy rather than rent. Even a section of your home can suffice.
- Hardware: Invest in the hardware recommended in our book (Chapter 6). As your business grows and your needs evolve, you can expand your capabilities by purchasing additional resources as needed.
- Energy: While you’ll need to pay for electricity monthly, consider investing in solar panels. The cost of renewable energy solutions is decreasing, making this a viable option for reducing long-term expenses. Plus, it’s an environmentally friendly choice.
Final Thoughts: Owning your infrastructure not only ensures greater independence but also allows you to build valuable digital real estate—an asset that appreciates over time. By carefully planning your investments and leveraging sustainable energy, you can secure your business’s future and contribute to a greener planet.
Like this article? Share it!