Let's compare a typical network solution and a hosted network solution

As we all know, having a network setup within your business is often an essential part of the day-to-day operations of a working business. Like all network solutions there are pros and cons to having a hosted solution. Lets Compare both types of network structures and start with the typical network setup shall we...

Typical Network Setup (having servers and handling the maintenance in-house or contracted)

Purchase servers, software, backup devices, any wiring needed for connectivity, ensure any compliance needed for industry specific standards are met, hire or contract someone to install/setup the network, pay for ongoing maintenance of hardware, replace hardware (servers, wiring, Etc.) every three/four/five years, start over at the beginning.

Now that we have all of the necessary ingredients for your network lets calculate the monthly cost for this type of network setup.

Add up the total cost of the servers, oh yea, include the setup fee if one was charged... now divide that number by the estimated number of years you intend to keep the servers before replacing them, now divide that number by twelve (the number of months in a year for those who are wondering why twelve). This number is the total monthly fee for purchasing those servers. Although they may already be paid off either by using your cash flow, this total is still what they cost you every month. If you had to borrow on a line of credit or other type of loan this cost increases due to interest against the borrowed money.

Next, calculate how many workstations you have currently...Got IT? Now, out of that total, how many do you replace every year? Once you have determined how many you replace each year, find the average cost you pay for a workstation and multiple that number by how many you replace each year. By now you should know that the magic number to divide that total by is what... that's right twelve. This is the total average monthly cost for replacing workstations every year.

Alright, almost done I promise... Do you have an in-house IT staff or do you contract, either way this step is simple. Take what you pay your IT Staff every month or what you are paying an IT contractor every month, this is the average monthly expense for maintenance.

Lastly, take all of your backup devices, anti-virus costs and all other related IT expenses for the year and divide that by twelve, this would be your miscellaneous IT expenditures every month. These numbers are quite high in instances where the IT maintenance and ongoing support are where they need to be considering the systems in place.

Now lets get the costs of a hosted network solution

Fist off determine how many users will be on the network. Take this number and multiply it by the monthly fee determined by a Hosted Network Company. This will be your monthly IT expenses, plus any after hours fees that may be charged. In most cases, a hosted network solution provider will not charge for after hours technical support, I'm sure that you can find some out there that do however. Simple yes, but this is just about all you need to do when determining IT costs when having a hosted network solution. This solution also grows as you grow and shrinks when you shrink. The fee for services reflect the amount of users you have, so if things get rough and you have to make some lay offs (not good) the fee decreases. With a typical network setup the maintenance fees or staff salaries stay the same. Although business has slowed a little, the costs still come speeding in not mater your businesses situation.

By the way, go ahead and extend the renewal period on workstations because the resources used on the local machines has decreased in turn saving you more money. Oh, and if one of your workstations craps out, at this point you could even think about using a thin client that costs between $200.00-$400.00 bucks.

Also, there would be no need to add up expenses concerning backups, upgrades, or repairs because you would have no equipment in-house. The hosted solutions provider would take on all of those costs for you, pretty nice of a company to do I think.

This solution typically costs less than the "standard network setup" for many reasons, the most common is because the hosted network solutions provider disperses the costs between hundreds or even thousands of clients, they can afford to always have the latest technology available. So as long as you have a fairly fast and reliable Internet connection (I would even recommend having two separate ISP's run Internet to your location for a backup connection should one fail) the hosted network solution could just save you money and headaches.