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network design question

I have a potential client who does not have a server, presently, who might be looking to get one depending on the quesiton I'm about to ask.  There seems to be 5 workstations/laptops in the office and what the client would like is to have a centralized place where all the documents can reside and have the 5 machines be able to access them.  From what I was told, over the phone, all machines are in a WORKGROUP so they should be able to get to the files, but I believe that what he is looking for is more of a business feel for his business.  I also believe that he presently does have some type of permission to some of the files/folders.  My question really begins by asking how to design this network?  Also, he mentioned that he would like to some how backup all machines, but how?  He also mentioned that he would prefer to back this up to the cloud, but I need some suggestions and possibly a cost for this service?  
1 Solution
If you are on a tight budget and don't need really tight security, the "server" could just be Windows XP or 7 Pro.  You can have up to 10 workstations connected to it.

If you enable Advanced File Sharing, you have login name/password security for whatever you care to share.

If you want something with "more of a business feel", take a look at the inexpensive servers from HP or Dell that have Windows Server Foundation Edition

In any case, centralizing the documents is a fairly simple process.

As far as "backup all machines" goes, more specificity is needed.  If what you are looking for is data backup, keep all the important files on the server (have Word/Excel/etc. point there for the default) and keep the server backed up well.  If you want that online, look at Mozy or Carbonite (or others).
An option for this situation may be a NAS box (Synology and QNAP have nice ones).  A small windows server would open up more functionality though.
Don't take this the wrong way, but if you are asking these types of question maybe your not the right person for this job.

This sounds like a very basic setup.

Suggestions IMHO:

Best long term solution is to get Window SBS and setup a Windows Active Directory setup.  However this is most likely the most expensive and would be the most disruptive.

Simplest and quickest solution is chakko's suggestion of a NAS box.

CompProbSolv solution of a Window Desktop OS may give you more control that a NAS, but does not allow as much future growth.  A desktop OS is limited to 10 concurrent remote computer access it.  So if the office grows to 11 or more users, you need another solution.  

Now you could setup a Linux box (which is the OS that most NAS devices run) as a file server.  But using a NAS device would be much easier to manage.
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I undestand that you ask about windows server, but you can do all you need with a linux box, it's opensource and you mostly don't need to worry about licencing, and get focus only on the hardware budget and your skill to put on production.
ee4itproAuthor Commented:
Can someone recommend a Windows Server Foundation Edition Server?  Also, what I'm I looking at as far as cost?
For example, Dell T110, quad-core Xeon, Windows Foundation, 4G RAM, 2 250G HDs, $1,025:

I'm not suggesting this as THE choice (need more info for that), but that this gives you an idea of a starting point.  I believe that HP has similar deals.

giltjr makes an excellent point about number of users.  How long do you see it taking before a 10-user limit (XP or 7 Pro) or 15-user limit (Server 2008 Foundation) is exceeded?

hvillanu makes a good point about linux, but support is an important question on that.  Do you feel capable of setting up and supporting a linux box (or a Windows Server box, for that matter)?  If not, what is the availability (and cost) of local support for either?

I would go for a entry level HP or dell server and Windows Small Business Server 2011 Essentials.  You dont need user licenses and its good for up to 25 users.  It will give you great business features like remote web workplace (webmail and remote file access), built in server backup , centrialized user account and security, file and print sharing.  You can also  backup of all the PCs on the local network to a device.

This product bridges the gap from Microsoft home server and Small Business Server.

If you are backing up PC's then you will need to get some large storage devices but they could be just usb 3.0 external drives maybe with network port NAS).  

You would not be able to backup the pc's online as this would require a lot of cloud storage space and use a lot of bandwith.  I would just backup files (Documents,photos,videos etc) online.  Online backup is great but unless you are paying through the nose you will need a full disater recovery backup to be taken offsite.

Price for OS roughly £280 for OEM or retail pack £480.

You will need some anti virus software so I would estimate a budget of £1500 for hardware and software.

If the clients are running Vista or Windows 7 now then they already have a built in image backup that could be used.
Keith AlabasterEnterprise ArchitectCommented:
A good option for you may be something as simple as Office 365 - costs from £4.00 per month per user and is fully secured and resilient. Allows the sharing of documents, collaboration, a centralised Exchanges ervice (if you want it), audio/video conferencing etc.

May be easier and cheaper for testing with before going for a server to do the same.
What you are asking is very simple,
1.      You need a server to hold all the files and share them with all the users, you need a backup system can be tape, nas, cd etc.
2.      You need windows server 2008, or 2003 with 5 user’s cals; you don’t need Small business server if you’re not doing an exchange email server.
3.      I know you said you have 5 workstations, a mix of laptops and desktops, you need to have at the lease a professional version of windows via it be xp, vista, and windows 7 on the desktops/laptops. The reason you need that version or higher, your computers won’t be able to join a domain if they are xp, vista, windows 7 home.
4.      You need at the lease with 5 computers an 8 port switch, 5 for ports for workstations and 1 port for the server and another port for internet, if they are going to be sharing the internet as well as files.
This is what you need to setup a basic network and share the files form a central location. Don’t get me wrong a workgroup is a network, but with the setup I’m talking about you don’t have to worry about if someone left their computer on or not.
If your workstations have the non-pro version of Windows (i.e. Home), you will still be able to access the server.  What you won't have is full Active Directory integration.  Depending on your security requirements, this may or may not be an issue.
I agree CompProb you don’t have to have pro versions of windows, but why not do it the right why if you he can afford it.  There is a reason that calls it home version; it’s not made for a real network environment.
Re: home vs. pro
One of the keys to successful design of anything, whether a network, hardware, software, etc., is making an efficient match between costs and needs/wishes.  For some, nothing short of redundant servers with 10G switches would be adequate.  For others, a simple NAS drive on a workgroup may be adequate.

If Windows Server software is used (I consider that a significant "if"), one needs to decide on workgroup vs. Active Directory.  Though I would generally recommend AD, if there are existing machines that have non-Pro versions of Windows (especially) XP, the upgrade cost can be significant.  When one considers the cost of software, and the time for installation and then reconfiguring the user setup when changing to AD, it is not trivial.  While the benefits can easily outweigh the costs, it depends on the user's needs.

If security needs are light, for example, there may be nothing wrong with the workgroup approach.

Similarly, though some additional features mentioned above (web workplace, exchange, etc.) can be very useful, one needs to address whether or not they WOULD get used in this particular installation.  If so, then they may well be worth the cost (initial cost, installation cost, maintenance cost).  If not, they may be an unnecessary burden.

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