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Unlocking Cost Savings through Server Upgrades

19 November, 2020

In today’s business landscape, the backbone of your operations likely relies on one or more servers. Whether you are contemplating server replacement or upgrading to enhance network performance, it is crucial to stay informed. As we conclude our series on Section 179 tax deductions, we turn our attention to leveraging these deductions to your advantage when upgrading your systems.

Disclaimer: We are not tax experts, and the following information is purely for educational purposes. Before making any changes based on tax deductions, consult your company’s CFO or tax professionals.

The Evolving Role of Servers

As technology advances and servers assume a more significant role in daily business practices, their importance cannot be overstated. Servers primarily serve as data repositories for computer networks, enabling collaboration, project sharing, and seamless teamwork. Whether you realize it or not, if you work in an office, there is a high probability that your work is stored on a server.

Traditionally, servers were physically housed within office premises and connected to computers on-site. However, in recent years, there has been a paradigm shift toward remote server access. This shift stems from two key factors.

Firstly, remote access allows traveling employees to connect to their company’s network and projects while on the move. This practice has long been prevalent among salespeople and executives, and it continues to be effective.

Secondly, the rise of remote work necessitates seamless server access for employees working from remote locations. As companies increasingly embrace remote work, reliable and uninterrupted network connectivity becomes paramount for these individuals.

Employees in the first case access servers sporadically, whereas those working from home or satellite offices rely exclusively on server-based operations. In either scenario, a robust, high-speed connection is crucial. The global pandemic served as a litmus test for the efficiency and capacity of companies’ servers, exposing any weaknesses in their networks.

Exploring Your Options

If you find that your server is sluggish or unstable, three primary options can address these issues:

  1. Upgrade: This entails enhancing your server’s software or hardware. If you prefer to retain your existing server, adding more RAM or memory can improve its functionality while remaining cost-effective.
  2. Replace: While the most expensive option, server replacement yields the most substantial results. By upgrading your system rather than just components, you overcome limitations imposed by aging hardware. The sky’s the limit, and you can tailor the new server to your specific needs while enjoying the benefits of a fresh warranty.
  3. Migrate: A popular choice in recent years, migration involves transitioning to a cloud-based solution off-site instead of maintaining a physical server on-premises. This option is ideal if your operations do not place excessive demands on a central system. One notable advantage of adopting a cloud-based solution is the elimination of maintenance responsibilities, as the hosting company and IT professionals handle upgrades and software maintenance.

The Time is Ripe for Server Upgrades

As remote work trends persist, companies will increasingly rely on their servers. We acknowledge that servers represent a significant investment, especially when catering to large groups of people across extensive distances. However, to remain ahead of the competition and maximize productivity, bold steps are necessary.

Moreover, upgrading or replacing servers at this juncture can yield financial benefits. This blog emphasizes the importance of considering tax benefits. Some companies explore avenues to offset profits and minimize tax liabilities, while others may have incurred losses that can be utilized at year-end. Seize the opportunity to upgrade this year and capitalize on Section 179 tax benefits. If you anticipate a loss this year, start planning for an upgrade early next year to gain an early advantage in terms of tax benefits.

Are you contemplating server upgrades or considering a cloud-based solution like a virtual office? Contact us today to explore the best options for your business. Even if the timing is more favorable next year from a fiscal perspective, it is never too early to begin planning for the future.

19 November, 2020