Your Server vs Cloud – Considerations, Trade-Offs and Costs – Part 3 - Staffing and Management Overheads
Beyond hardware and licencing, day-to-day management requirements often shape the true experience of running server environments.
In this second article, we explore how software and licencing models differ between traditional server environments and cloud platforms.
Back to the blog
Again, we’ll reference Microsoft Azure for consistency.
Software and Licencing
| Topic | On Premises | Cloud (Microsoft Azure) |
|---|---|---|
| Initial agreement | Most of the time, a business will purchase a particular version of Windows or SQL Server licences which are tied to a specific version, e.g. Windows Server 2022 or SQL Server 2025. | When using the Pay-As-You-Go (PAYG) option in the cloud, the cost of the Windows Server licence is included in the running cost of any cloud servers (virtual machines) that you might use. This can be on any supported Windows version (currently between Server 2016 and Server 2025). |
| Licencing | Most businesses don’t purchase optional Software Assurance that accompanies a licence. Microsoft sells it separately, and it allows customers to upgrade to newer versions as they’re released e.g. from Windows Server 2022 to Windows Server 2025. | The best savings for licences come from buying them upfront for a given period e.g. 3 Years, and this is something I frequently engage with customers on to maximise cost savings in the cloud. Other licences like SQL Server, (which can be costly to purchase upfront), can be consumed by the hour at highly competitive rates when used with an Azure virtual machine, allowing again for customers to only pay for what they use, when they need it. |
| Software Assurance | If Software Assurance isn’t purchased, when that version of the software reaches end-of-life, security updates are no longer provided by Microsoft and at that point new licencing (and potentially in most cases new hardware) is required. | If you are one of those who does have Software Assurance within your existing licences, you are able to bring those licences to Azure and use them (with some limitations) and therefore see an increased saving in cost. |
| Remote desktop | (Excluding Azure Local), most on-premises or server environments want to provide some form of ‘Remote Desktop’ to end users to provide access to the ERP applications or a shared desktop. This means purchasing additional licences, such as Remote Desktop Client Access Licences for each user, Citrix or similar solutions that provide this functionality to end users. | The modern application delivery service (think Remote Desktop) in the Azure cloud; Azure Virtual Desktop can provide access to apps and virtual desktops with no extra licences needed. It can utilise your Microsoft 365 licences if you have either M365 Business Premium or M365 E3. This is easier to manage than “how many RDS users do I have” and remove another line item on the invoice. You’re already handling these licences out to users. |
In Summary
On-premises environments commonly rely on licences purchased and maintained over long periods. While this approach can feel familiar, it may also introduce constraints as software versions age.
Common challenges can include:
- Limited flexibility when requirements change.
- Compatibility considerations with newer technologies.
- Difficulty tracking licence compliance.
Cloud platforms introduce more adaptable licencing options, allowing organisations to align usage with actual needs.
Rather than committing to long-term capacity upfront, businesses can adjust environments more easily over time.
In the next article, we’ll look at management and support overheads.
About the author: Liam Freeman is the Infrastructure Director at Klipboard. Klipboard Managed Services, formerly known as Excenta, helps organisations to migrate to, optimise and manage Microsoft Azure and Microsoft 365 environments - on your own terms. Whether you want full end-to-end management or a co-managed model alongside your IT team, our Microsoft-accredited team deliver a secure, high-performance cloud infrastructure that’s tailor-made to fit your business.
Klipboard Managed Services also specialises in managing the cloud environments for companies in the merchant sector, in particular, users of Epicor – BisTrack and Intact IQ application software. Klipboard Managed Services is engaged with more than 50% of Epicor’s UK BisTrack user base, and a growing number of North American BisTrack users. We have extensive experience in providing and managing the Microsoft Azure cloud environments for firms in the merchant sector.
Find out more here: Klipboard Managed Services
