Should I have my own server or make use of cloud computing?
Cloud computing is definitely worth investigating before going to the expense of having your own server.
Companies like Rackspace and Amazon are probably the 2 most widely know. We use Rackspace extensively and have found the service to be very reliable. Although it is US based but it depends on what you need the server for.
The decision to host something on the cloud or run your own server is dependent on each particular business. Cost for the actual service is part of it, but there's also things like data privacy and who owns your data, the cost of an enhanced internet connection (you'll find your staff require not only more speed, but to be able to upload and download more data - you have to remember that now ALL of this is going over your internet connection)
then there's things like preventing rogue employees from accessing data outside of work time. If you have an inhouse IT platform, then your team usually cannot access data outside of work hours, so if you've got someone who is leaving, or intent on doing damage, they can only do it while at work. Plus, you can log this and know what's going on.
If your malicious employee is able to access all your systems from home and export all your customer service records and provide them to a competitor, how would you stop that? And what sort of logging and security is in place, what info will the vendor give you?
In-house servers aren't the solution for all businesses, but equally, the cloud isn't the solution for all businesses. It also drives better recurring revenue for IT providers than just getting a server installed. And interestingly, on the idea that it's far cheaper to run all your services on a cloud-based platform, consider your TCO or Total Cost of Ownership. Add up the cost of all the hosted services you pay for on a monthly basis, then add a multiplier of 3 to give you a 3year TCO. Now look at the cost of an inhouse server (which is normally capitalised over a roughly 3 year life span).
You'd probably need to include in your TCO the cost of your business losing access to it's critical business tools if your internet is out for a day, or 3, or 5, or whatever. Plus, even though it's "backed up" you'll still want to be backing up your data anyway - what happens if your provider falls over or goes bankrupt and you lose all your data?
One final point.. the truth of the matter is, reselling cloud services is far more revenue friendly for IT Providers - we generate ongoing recurring revenue for minimal effort, as opposed to the installation of hardware, which gives us a single one-off revenue hit. That's the reason so many providers push it as the solution. They are looking after their business over the mid to longer term, rather than focussing on what your business actually needs.
I run a business with 6 staff (and growing rapidly): we do not have a server & I aim to keep it that way. We store all our data in the cloud, we run cloud apps for CRM, accounting, payroll and so on. Works fine - it is far cheaper, and I do not have the worry of managing an IT infrastructure that is not my area of expertise.