Office 365 for small business do I still need server

Hello experts,
I have a potential new client with 12 users that has an onsite domain controller and file server (Dell server running 2008). They are already with office 365 and use the exchange aspect. They are keen to know if they can loose the server completeley. They have 250GB on the server currently and would like to move the data to onecloud.
Can someone just lay out the pros and cons of keeping a server? Is it best practice to run an on premise DC for local security and authentication?
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Vasil Michev (MVP)Commented:
O365 does not offer you any DC/AD-like functionalities. While you will be able to join W10 machines to Azure AD, there is no GPO there for example, etc. Now, 12 users I guess might be fine in workgroup setting as well, but that's up to you and them to decide. Certainly, if they want to keep a similar functionality, you will either have to keep a local server or provision a DC in Azure.

If they only concern is mail/file shares, you can move everything to the cloud. And of course make sure their internet connectivity can handle this.
unrealone1Author Commented:
thanks so essentially they would lose
Group Policy authentication,
running centrally based AV
centrally managing printers etc.
Lee W, MVPTechnology and Business Process AdvisorCommented:
Yes, without a server, they lose centralized management - Group policy, the ability to log on to all systems with one user name and password, centralized printer management. People also have a tendency to save things to their desktop and unless they're really good about that it increases the chance of data loss (assuming you are using Folder Redirection for the Desktop and the server is regularly backed up). In addition, it depends on how fast their internet connection is and what kind of files they use.  If it's truly nothing but small word and excel files, it's fine with most connections faster than DSL.  If they are using files that can be hundreds of MBs in size then it can be a serious problem if they don't have REALLY good internet (like 100 Mb up and down at least).

Also, some applications NEED a central storage point on the LAN - multi-user access databases can't run from the cloud effectively.

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unrealone1Author Commented:
Thanks..that isveryhelpful
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