What Does a Server Do for Your Small Business?

What do servers do, and how can a small business choose suitable servers? Servers are the brains and brawn of your business’s IT infrastructure, but if you don’t have an IT background, you may wonder what exactly a server is and why it’s so important. By the end of this article, you’ll know the answers to five important questions about servers – including how to buy the right server and keep it healthy.

Top 5 Business Questions About Servers

If you run a small to medium-sized business (SMB) and you work with an IT staffer or vendor, you probably hear the word “server” thrown around a lot. I’m sure you’re aware they’re not cheap (whether you’ve purchased your own server(s), paid for cloud servers, or both).

To protect your investment – and to avoid unnecessary downtime – you don’t need to become an expert on servers. But knowing the answers to these five questions about servers for small will help you make good purchasing decisions.

1. What Is a Server?

What is a System Security Plan (SSP)?

A “server” serves data to a “client” that requests it. Servers can be hardwired into your business’s network or connected wirelessly.

The confusing thing about the term server is it can mean both hardware AND software.

A server is a program – a type of software. But the computer device on which server programs run is also commonly called a server. So, a machine called a server may support many different server programs. (Learn more about what makes a computer a server in the answer to question #4.)

Example: How a server sent you this web page.

Say you used the web browser Chrome to google the topic, “What does a server do?” Your “client device” – a PC, smartphone, tablet, etc. – requested this page. Chrome’s request was processed by a web server, which delivered this page back to Chrome which is displaying the page for you now. This is a highly simplified description of the process, of course. Many types of servers may have played a role in processing your request and sending you this page.

3 Servers you probably use every day.

  1. Your email account is stored on a mail server that sends your emails and receives them from other accounts.
  2. A file server provides central storage for data files so clients on the network can access them.
  3. An audio/video server allows you to broadcast streaming multimedia content.

Here’s a video describing the basic client/server relationship. (Note: It’s several years old, so the machines involved look LARGE.)

2. What Are Servers Used for in Small Businesses?

The 8 reasons that most SMBs use servers are to:  

  1. Host domain-specific email.
  2. Store files.
  3. Provide remote access to the company’s network, such as via a virtual private network (VPN).
  4. Control which users have permission to access which resources within your company’s IT environment.
  5. Host their website.
  6. Conduct ecommerce.
  7. Run key business software, such as customer relationship management, accounting and HR, so employees don’t need to store all that heavy-duty software on their PCs.
  8. Data backup. 

For the most part, all these servers are running in the background, enabling the standard tools and applications you use day to day.

Security: The common thread in server capabilities.

A common thread in all the above business functions is security. If everything is running through networked servers as a central hub, it’s easier to protect that environment with firewalls, password-protected resources, and other security measures.  

A word of caution: Having a central hub for your data and applications is critical, but it also means a hacker who succeeds in accessing your servers has the keys to your virtual kingdom. So, if you have servers, they should be monitored by experienced IT security professionals.

Hybrid cloud and on-site servers can be a good solution for SMBs

3. Which is Better, On-Site or Cloud Servers? (Spoiler: Maybe Both)

Depending on when you started your business, cloud servers may not have been available yet, or they may have been way too expensive for a business your size. Today, many SMBs use at least some cloud-based services and software.

The physical servers behind cloud services are housed in giant server farms all over the world, run by providers such as VMware, Citrix, and Microsoft. What can you expect from cloud servers compared with in-house servers? Here are some differences.

Key differences between in-house and cloud servers.

In-house Server
  • High initial investment for hardware (or an ongoing cost if you’re renting) plus installation. 
  • You have physical control over your data. 
  • You can build a server that is specifically configured for your company’s needs. As these needs change, you’ll need to upgrade or replace the machine(s). 
  • You need in-house IT staff or an IT support contractor to maintain the hardware and possibly to install and upgrade software. 
  • Internet outage doesn’t cut you off from your data. 
  • Physical damage to your hardware can destroy data that isn’t backed up offsite.
Cloud Server
  • No cost for the server itself, but you pay ongoing hosting fees. 
  • Your cloud provider controls access to your data. 
  • You may adjust the level of service (storage capacity, data speed, etc.) of your cloud services as necessary. Your needs may outstrip your budget. 
  • The overhead of maintaining hardware and installing software is included in your fees, but levels of tech support vary among providers. 
  • Internet outage can cut you off from your data, unless you have redundant internet connections. 
  • Physical damage to hardware won’t affect data stored in the cloud. However, cloud providers have different levels of backup capacity and liability — you may need additional backup arrangements. Also,  restoring data may be expensive, especially if you need it restored immediately.

Why a hybrid in-house/cloud solution may be the best choice.

Your business may be able to cost-effectively offset the weaknesses of in-house services with the strengths of cloud solutions, and vice versa.


Store your most sensitive customer data or proprietary software on in-house servers, to limit access of third parties and hackers. But if you do this, be sure your backup process works and is tested regularly.

Also, you’ll need IT expertise from your staff or an IT services provider. Use cloud subscriptions for major applications that can otherwise slow down your networks and devices. Microsoft’s Office 365 and Adobe Creative Cloud are examples of major software suites that have become cloud-based subscription services.

Back up your data from an in-house server to a separate in-house storage device, and also use a cloud-based backup system. This guards against prolonged business interruption, even if your physical devices are damaged or destroyed.

Hybrid in-house/cloud models are evolving rapidly. It’s important not to lock your business into any long-term arrangements without consulting with IT experts you trust.

4. How Do I Choose the Best In-House Server for My Size of Business?

An excellent resource for information about choosing servers for small to medium-sized businesses is a Teal partner, Velocity Tech Solutions in Roseville, Minnesota. Velocity’s VP of Corporate Sales, Anne Tarantino, says SMB owners often make one or more of these two mistakes in choosing servers.

Mistake 1: Spending too little on a server that doesn’t have enough redundancy

Get a business-grade machine explicitly made to handle multiple servers.

Some business owners ask for help converting a basic computer into a server, which is certainly possible. But Anne says for most businesses that have grown beyond a handful of users, it’s a mistake.

Get a business-grade machine explicitly made to handle multiple servers, with redundant hard drives and power supplies, Anne stressed.

“Yes, it costs more for redundancy, but if your system goes down because you don’t have it, you’re probably losing money every minute you’re down.”

A good example is small manufacturing companies – many of which run on networked, computer-driven machines.

“You don’t want your employees just standing around or being sent home.”

Mistake 2: Spending too much on servers you can’t afford to maintain

Some companies go too far in the other direction, thinking they’ve got to have the biggest, baddest machine on the planet, said Anne.

She’s seen too many worst-case scenarios play out when SMBs overspend.

“Companies have called us to remove equipment because they’ve gone out of business, in part because they couldn’t afford the servers they bought from somebody else. It’s really sad,” Anne said.

2 Solutions for getting more server power for your buck.
  1. Leasing: If you don’t have the up-front money for the servers and related hardware you need, consider a leasing agreement. This also makes it easier to upgrade without a major budget hit. Although, in the long term, you’ll probably pay more than if you buy the hardware outright.
  2. Buy Off-lease Equipment: Hardware returned after being leased is a generation behind, but usually can still handle new software. Anne says off-lease products – and the annual service agreements for them – are often half the cost of new equipment.
How to avoid under- or over-spending on servers

Work with a professional who is familiar with the needs of SMBs, Anne recommends. You’ll know you’re doing that if – before they recommend any product – they ask specific questions about how your business uses data, such as:  

  • How many employees/users are on your network? 
  • Do you tend to store mostly text files? Large AutoCAD illustrations? Photos? InDesign publication layouts? And so on. 
  • Are most of your employees accessing network data from a central office, or remotely? 
  • Do you store sensitive personal and financial information from employees and clients?

Once a server vendor has a complete picture of your business operation, they can recommend appropriate solutions to choose from. If you’re getting the hard-sell on a particular server right out of the gate, take a step back.

5. How do you Protect Your Investment in On-Site Servers?

Once you’ve made the decision to buy server hardware and software, this is how you can make sure you get the most from your investment.

Buy the right maintenance contract.

New servers typically come with a service contract from the manufacturer for up to three years, which is often a good choice. After that initial contract, if the equipment is still meeting your needs, you’ll probably be offered extended maintenance options by the manufacturer.

Anne says to weigh the option of a maintenance contract for IT assets such as servers from a third-party provider after the OEM’s initial contract expires.

Her article on LinkedIn points out that some OEMs will pressure you to unnecessarily upgrade rather than repair hardware. And when the OEM send techs, they’re often third-party subcontractors – the very same people you could be buying a less expensive maintenance contract from.

If you have a managed IT services provider, that firm should be able to help you sort through the server maintenance contract options and even coordinate repairs with warranty providers.

Keep servers clean.

VisiCom Services, now known as Centaris, an IT services company in Sterling Heights, Michigan, had a good blog post in 2018 about how to maintain servers (which is sadly no longer available). A major culprit of server failures, according to the post, is dust:

Dust, and other similarly sized contaminants, can easily make their way into your server’s components, where they build up and become an insulator. As a result, your equipment can become up to 30ºF warmer - and just like in human beings, a rise in internal temperature to this degree can be lethal.

We asked Pat Casey, VisiCom’s president for almost 25 years, what most small businesses whose servers crash because of dust do wrong.

Teal Blog Images 10

“A lot of these machines are out in the open, on a dusty carpet or a bare floor,” Pat said. “But even if they’re in an enclosure, unless that enclosure is filtered for dust, you have the same problem.”

Keep servers cool.

To keep servers out of everyday traffic, many SMBs find a small space like a closet or cabinet. But if you do that, says Pat, make sure that space is ventilated.

Pat recalled a client who had custom furniture made for servers, but the enclosure didn’t work because it wasn’t ventilated. The machines overheated.

The furniture makers had to retrofit the unit with exhaust fans. But the fans then overheated the small room where the furniture was, so they had to improve the airflow for the entire room.

The moral: Heat is your enemy; airflow is your friend.

Use a continuous monitoring system.

Pat noted that modern servers have heat sensors that can connect with monitoring systems. If you don’t have IT staff available to respond to alerts, be sure to work with an outside IT services firm. They should be able to shut servers down remotely to protect them from serious damage.

Heat is only one thing monitoring systems track but be careful not to set up the system to generate alarms for every little thing that could go wrong, Pat said. Too many alarms that turn out to be nothing can train you to ignore all alarms – even the really serious ones, like overheating servers.

Servers Enable Business Growth

When we work with clients who are installing their first servers, it’s usually a company that’s beginning to really thrive and grow. This is a crucial point in a business’s life cycle. Making good IT infrastructure decisions can majorly impact their ongoing success or failure.  

The capacity to store and move data and run more powerful software is often a key driver of productivity and good customer service. Servers do this for you if you choose them wisely and take good care of them.

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