How to choose a server for your small business

So, your business has grown large enough that you need your first server. Congratulations! Acquiring a server is a big decision, so some trepidation is understandable. This guide will explain the basic principles of the technology, help you decide which class of server will best fit your needs, and give you some ballpark pricing, so you don’t overspend or acquire a product that’s insufficient for your needs.

I’ll also explore the chief alternative to running your own server–relying on the cloud–and provide a primer on one of today’s hottest server trends: virtualization. You’ll find this guide useful even if you ultimately decide to hire an IT consultant to analyze your requirements and make a purchase recommendation.

Server Basics

Although a small server might look no different from a high-end desktop PC, the machines are designed for very different tasks. A desktop computer is designed for one person who needs a user-friendly operating system to run desktop applications such as a word processor, a spreadsheet, an email client, and a Web browser. A server runs a specialized operating system designed to support many users. It’s engineered to run multiuser applications such as email, messaging, and print servers; shared calendar programs; databases; and enterprise resource planning and customer relationship management software.

A server also makes it easy for your employees to share data and collaborate, since it operates as a central repository for all of your documents, images, contacts, and other important files. It can host a company intranet, for sharing information with your employees quickly and economically. Set up a virtual private network, and you and your employees can access the data on the server remotely from anywhere you have Internet access. On top of that, a server can automatically back up your desktop and laptop systems, so you’ll never lose critical data if one machine fails or is lost or stolen. Servers are designed to be reliable, secure, and fault-tolerant, with redundant storage options. If you expect your business to expand, choose a server that’s scalable and can grow with you.

If you operate a small to medium-size business, the question isn’t “Do I need a server?” but “Which type of server do I need?” Before we get into that, however, let’s address the number-one alternative to operating and maintaining an on-site server: relying on the cloud.

The Cloud Alternative

Why not put everything in the cloud? Services such as Amazon Web Services, Microsoft’s Windows Azure, and Rackspace Cloud Hosting offer a number of benefits. For starters, they don’t involve a significant capital outlay, and you won’t need an IT staff to manage the server. You won’t need to worry about the equipment or software becoming outdated or obsolete, either. In the days when businesses relied on big-iron mainframes, this strategy was called “time sharing.” And the cloud is burdened with many of the same limitations as that model was.

The stability and reliability of whichever service provider you choose is your first and most important concern. If that firm goes belly-up or experiences a disaster, your business could quickly grind to a halt. What’s worse is that you could temporarily or permanently lose access to all your data. If you lose your connection to the Internet, you’ll be cut off from your applications and data, and your employees won’t be able to share files. You could lose the ability to manage your business until your Internet connection is restored. And if your business uses large files, and your broadband connection is too slow, your operation’s productivity will suffer.

Storing your data on equipment outside your immediate control also brings up privacy and security concerns. And although you’re not paying for an IT staff, ongoing maintenance, and investments in new capital equipment directly, you’re still incurring a share of those costs indirectly–they’re reflected in the fees you’re paying the service provider. The cloud is no cure-all.

Choose the Right Server for Your Needs

The big names in the server market are Dell, Fujitsu, HP, IBM, Lenovo, and Oracle. Choosing the right server depends in large measure on the applications you intend to run on it. If all you need is file sharing, automated client backup, and light-duty remote access for PCs (typically ten or fewer), consider a NAS or even a Windows Home Server machine; HP, Netgear, QNAP, Seagate, and Synology are the major players in this arena. If your business has more than ten employees using computers, if you need to operate an email or print server, manage a complex database, or run sophisticated server-based applications (such as ERP or CRM), if you have very large storage requirements, or if you require large-scale virtualization capabilities, you’ll want a more robust option such as a tower, rack, or blade server.

A Virtual-Machine Primer

Before I go into a detailed explanation of each of those server types, here’s a quick primer on virtualization for anyone who might be unfamiliar with the concept. Small to medium-size businesses have been behind the curve when it comes to adopting virtualization to date, but the technology can deliver significant benefits to companies of nearly any size because it allows the enterprise to make more efficient use of IT resources.

Virtualization enables one server to behave as several servers, each with its own operating system and unique set of applications. A virtual machine consists solely of software, yet it has all the components of a physical machine: It has a motherboard, a CPU, a hard disk, a network controller, and so on. The operating system and other applications run on a virtual machine just as they would on a physical machine–they see no difference between the two environments.

In virtualization, a program known as a hypervisor places an abstraction layer between the operating systems and the hardware. The hypervisor can operate multiple virtual machines with the same operating system or different OSs on the same physical server. Microsoft, Oracle, and VMware are among the top virtual-machine developers.

How does virtualization make more efficient use of your IT resources? Servers are designed to accommodate peak–versus average–loads, so they’re underutilized most of the time. In fact, the typical server utilizes only between 5 and 15 percent of its overall resources. Running several virtual machines on one physical server uses those resources more efficiently, boosting utilization to between 60 and 80 percent. Instead of operating one physical server for email, one for database management, one for your intranet, and yet another for CRM, you can run all of those applications on several virtual machines running on the same physical hardware.

Virtualization eliminates the need for additional physical servers, and the tech-support overhead, power, cooling, backup, physical space, and other requirements that go along with them. What’s more, you can deploy a new virtual server in a few minutes.

Now let’s examine the various server options on today’s market, starting with the most basic.

Next Page: Server Options

Server Options

Windows Home Server 2011

As you can tell by the product’s name, Microsoft’s Windows Home Server 2011 is aimed squarely at the consumer market. It’s designed for ease of use and has strong media-handling capabilities, including real-time transcoding and integration with Windows Media Center. But the operating system is built on the same code base as Microsoft’s very strong business-oriented server OS, Windows Server 2008 R2, and it could be good for your business if you don’t need to support more than ten PC clients.

Windows Home Server machines are designed to operate “headless,” meaning you don’t need a monitor, mouse, or keyboard to manage them. Instead you use the Remote Desktop Connection feature in Windows to connect to the server over your network. A server running Windows Home Server 2011 won’t be capable of virtualization, but it is a very inexpensive file-sharing and backup option, and it does support secure remote access. LaCie’s 5big Office is one good example of a Windows Home Server machine tailored for small business. It costs just $599 and includes a single 2TB drive, 2GB of RAM, and a gigabit ethernet interface. It offers four additional drive bays for expansion, and it supports RAID 0, 1, 5, and 5+spare.

Microsoft is expected to release Windows Server 8 between the third quarter of 2012 and the first quarter of 2013 (you can download a beta version now). The company is building the new OS on the same code base as Windows 8, and the product places considerable emphasis on cloud computing and virtualization. Microsoft has declined to say whether it will release a consumer version of Windows Server 8 or if Windows Home Server 2011 will be the end of the line for its consumer-oriented server OS strategy.

Network-Attached Storage

NAS is a simple and inexpensive server infrastructure; in that respect, it’s similar to Windows Home Server. But NAS can deliver plenty of bang for the buck to businesses with modest server requirements. A NAS arrangement can be as simple as plugging a USB hard drive into a USB-equipped router, but most small businesses will need something more robust. A high-end NAS can rival a full-blown server, including support for virtualization.

A hardware device, commonly referred to as a NAS box, acts as the interface between storage and clients on the network. The NAS box requires no mouse, keyboard, or monitor, and is controlled by a remote client over the network. A bare-bones embedded operating system–typically Linux-based–runs on the NAS, although the latest devices also provide a front-end interface that makes setup and administration over your network easier (again, similar to Windows Home Server).

You can purchase a simple NAS box with a single 1TB drive, such as Seagate’s BlackArmor NAS 110, for less than $200, with prices rising rapidly as you add capacity, expandability, and other features. If all you need in a server is a device for sharing files, gaining remote access, automatically backing up client PCs over the network, or hosting IP security cameras, one of these budget models will fit the bill. At the other end of the scale, you’ll find devices such as Synology’s RS3412xs ($4000 plus, not including the drives), a rack-mount NAS device that can host up to ten hard drives and even supports virtualization.

Tower Servers

Tower servers (and their smaller cousins, micro towers) are the first step up from a NAS. You can easily mistake a tower server for a desktop PC–and in fact, you can press a desktop PC into service as a server. Tower servers cost more than NAS products, but they’re much less expensive than rack-mount systems. They can operate on the floor or on top of a desk, but you can also retrofit them to sit in a rack. Tower servers are generally quiet, because they don’t require a lot of cooling fans. A high-end tower server with a fast CPU, lots of RAM, and a plethora of hard drives can pack a punch, especially when you take virtualization into account (provided that the CPU and operating system support it).

On the downside, you’ll need a keyboard, monitor, and mouse to manage each tower server, or you can invest in a KVM (keyboard, video, mouse) option that enables one set of peripherals to control several machines. (You can control micro towers running Windows Server using Remote Desktop Connection via a client PC.) More important, a tower server provides limited scalability once you’ve maxed out its capabilities. If you anticipate your IT requirements expanding rapidly, a rack or blade server is a better alternative than finding space for a bunch of towers.

Tower servers come with the same operating system choices as rack and blade servers do, including various flavors of Windows Server and Linux. Prices range from $350 for an HP ProLiant MicroServer with 2GB of RAM and a 250GB hard drive (expandable to four 2TB drives) running Windows Server 2008 R2 Foundation to $2500 for a Dell PowerEdge T710 tower server with an Intel Xeon CPU, 4GB of memory, and a single 500GB hard drive. Be aware that not all tower servers include the price of an operating system.

Rack Servers

If you anticipate the need to run several servers, either right away or in short order, consider moving up to rack-mount models. These types of servers come in a standard width (to fit in a 19-inch rack) and a standard height (a multiple of 1.75 inches, or 1U; a standard rack is 42U high). A rack permits you to fit many servers into a relatively small footprint, and typically it includes a cable-management system to keep your installation neat.

Most rack servers are highly expandable, with sockets for multiple CPUs, copious amounts of memory, and lots of storage. Rack-server systems are highly scalable, too; once you have the rack in place, you won’t need floor space for additional servers until the rack is full. Although they typically cost more than tower servers, they’re cheaper than blades.

Since rack servers operate in very close proximity to one another, they require more active cooling than tower servers do. The fans in these servers can be quite loud, and you’ll need a climate-control system to keep a full rack cool. For those reasons, most businesses isolate their rack servers in a dedicated room. Rack servers can be more difficult to maintain, because they must be physically pulled from the rack for servicing. And like a tower server, rack servers require a KVM arrangement for setup and management.

An entry-level rack server in Lenovo’s ThinkServer RD230 line includes a dual-core Intel Xeon E5503 CPU; four 3.5-inch hard-drive bays, with support for RAID 0, 1, 5, and 10 (no drives are included); and 2GB of memory (with seven additional slots for expansion) in a 1U enclosure. It sells for about $1000.

Prices escalate quickly as you add CPUs (or CPU cores), memory, hard-drive bays, virtualization capabilities, and other features. When you compare the prices of rack servers, be sure to include the cost of an operating system and any embedded hypervisor (for virtualization) that you might want, as these elements are not always included in the base price. You should also consider the price of the rack and the mounting rails you’ll need to install the server.

Blade Servers

The primary distinction between a rack server and a blade server is that several blade servers operate inside a chassis. Adding a new server is as simple as sliding a new blade into the chassis. You can install other network components, such as ethernet switches, firewalls, and load balancers, alongside the servers in the same enclosure, and you can install the whole assembly in a rack. Since the chassis provides the power, cooling, input-output, and connectivity for all the devices inside it, you don’t have to deal with new cables when you add something. Blades are neater and can pack more computer power into a given space than any other server ecosystem, yet their upfront cost is higher because you must also purchase the enclosure.

Blade servers do have their drawbacks. Typically they provide fewer expansion opportunities because they aren’t equipped with as many PCIe slots and drive bays as tower or rack servers are. On the other hand, businesses deploying blade servers usually have shared storage, such as a storage area network, to support their blade servers (and some blade chassis can accommodate SAN storage right alongside the servers). As you’ve probably guessed, housing all those components in such close proximity generates a lot of heat. Blade systems, like rack servers, require plenty of active cooling (usually augmented by fans mounted inside the chassis).

The Bottom Line

If all you’re looking for in a server is file sharing, client backup, and limited remote-access capabilities for a small number of employees using computers (ten or fewer), a Windows Home Server machine or a NAS will satisfy your requirements with an extremely modest investment. A larger small business that needs just one or two more-powerful servers would be better off with towers. They don’t take up a lot of floor space, and they don’t require elaborate cooling systems, but they’re easily expanded, and high-end models can support virtualization.

Once your IT requirements grow beyond what a couple of servers can do, it’s time to consider moving up to a rack server. Dozens of these machines can fit in the same footprint as a couple of towers, and this server architecture is quite scalable. Blade servers are even more space-efficient and scalable. If you need more servers than will fit in a rack, you’ll be happier with a blade ecosystem.

An entry-level IBM BladeCenter S chassis, which can accommodate up to six one- or two-processor blade servers (or up to three four-processor models) and provides two disk modules and four switch modules, costs about $2700. An IBM BladeCenter HX5 server equipped with an Intel Xeon CPU, 16GB of memory, and two hot-swap disk bays (drives not included) is priced at $6227. As with the other types of servers I’ve discussed, list prices don’t include an operating system or virtualization capabilities, and prices climb rapidly as you add features and components.