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When to get a server

Hello Experts,

I would like some input on when is the right time to move from a workgroup to a server based environment.  I need to put it in terms that a small business person can understand and get the value of why they should spend money on product and services to implement even the entry level server.

The reasons I can come up with are:
1. Central control and administration for users, data and backups
2. Better sercurity
3. Better "network" perfomrance/bandwidth (in the sense of sharing files, etc..)

Ultimately small business owners are going to look at cost.  They won't want to spend money without getting value.  If they can't see the value they will go low cost.  At least they cost they can easily identify.  Headaches, performance and bad network design are a cost because of wasted user time, etc...

I would love to get any input and ideas.

I am putting 500 points becuase this may need to be shared and I do want a lot of input.
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Paulmacd: I agree but under what at what point. For example, if I have a growing company that has two pcs, a server may not be a good idea, if they have 30 pcs, that is obvious...   At what point has your experience there is a good payback?
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As several of the contributors have stated, it depends, it is subjective and there is more than one issue, that is, did I mean a server, or active directory, etc..

Although this is a complex issue, ideally it boils down taking care of IT so the  customer doesn't have to think about it.

With that said, it appears the key factors are: performance, application requirements, volume, frequency, reliability, security, usability, cost.  Or in other terms what is the value proposition.  Again, these are factors that doesn't mean you need high security, in fact, I have a customer who insists that there are no passwords on their systems.  I explain the risk and move on....

Thanks for the feedback!