The question of whether to run an on-premise server or move to a hosted desktop is not a technology question. It is a financial and operational one. Practices that get it wrong do not usually do so because they chose the wrong technology — they do so because they compared the wrong numbers.

This guide sets out both models honestly, with realistic costs for a UK accountancy practice, so you can make a properly informed decision.

The hidden cost problem with on-premise

The most common mistake practices make when evaluating on-premise vs cloud is comparing the wrong things. They compare the upfront server quote against the monthly hosted desktop subscription — and conclude that the server is cheaper.

Over 12 months, it often is. Over five years, it rarely is. The reason is hidden costs — the ones that do not appear in the initial hardware quote but accumulate steadily after installation.

A practice that buys a server for £8,000 will also, over the following five years, typically pay for:

• Annual maintenance and support contract (£800–£1,500/year)
• Electricity to run the server 24/7 (approximately £3,500/year — and potentially double that with cooling)
• Backup software licences (£300–£600/year)
• Firewall and security software renewals (£400–£800/year)
• Replacement parts — hard drives fail, RAM fails, power supplies fail (£500–£2,000 over five years)
• Emergency callout costs when something goes wrong at the wrong moment (£150–£300/hour)
• Windows Server licence renewal or upgrade (£600–£1,500)
• A second hardware cycle at year five if the server reaches end of life

A realistic five-year cost comparison: 10-user practice

Let us work through a realistic example for a 10-person accountancy practice. These figures use current UK market rates.

Over five years, hosted desktop at this practice size is roughly half the true cost of on-premise — not because the monthly subscription is cheap, but because on-premise carries a long tail of costs that rarely appear in the initial conversation.

Where on-premise can still make sense

Honesty requires acknowledging the cases where on-premise is genuinely the better choice. It is not always cloud.

• Very large practices (30+ users) — at significant scale, the economics of dedicated infrastructure can shift, particularly if you already employ an IT person to manage it
• Practices with specific low-latency requirements — if your software absolutely requires local network speeds that internet connectivity cannot reliably match (rare in modern accountancy software, but worth checking)
• Practices that genuinely want full physical control — some partners simply want to see and touch the hardware. This is a preference, not a technical requirement, but it is legitimate

For the majority of UK accountancy practices — particularly those with 5 to 25 staff, running IRIS, TaxCalc, Sage, or similar — hosted desktop on a well-configured private cloud is the more cost-effective and operationally simpler choice over a five-year horizon.

The per-user pricing trap

One aspect of hosted desktop pricing that practices do not always scrutinise carefully enough is the per-user model — and specifically, what happens to that bill as the practice grows.

Most hosted desktop providers charge per user per month. Market rates in 2026 typically range from £35 to £65 per user per month for a professionally managed service. At 5 users, that is £175–£325/month. At 15 users, it is £525–£975/month. At 25 users, it is £875–£1,625/month. The bill scales linearly with headcount — indefinitely.

The alternative — used by some larger practices and by clients who have outgrown standard per-user pricing — is to move to a dedicated infrastructure model, where you rent or own the underlying server capacity at a fixed cost, and pay a separate management fee. As user numbers grow beyond a certain threshold, this model becomes significantly cheaper than per-user pricing.

What the comparison does not capture

Numbers only go so far. There are real differences between the two models that do not appear in a cost table but affect a practice's day-to-day operations significantly.

Downtime and filing deadlines

A server in a cupboard that fails during the last week of January is a crisis. Recovering from a server failure typically takes hours — sometimes days. A well-run hosted desktop environment with redundant infrastructure and automated failover recovers in minutes, not hours. For an accountancy practice, the cost of downtime during filing season is not just the IT bill — it is client relationships and professional reputation.

Remote working

Post-pandemic, most practices now have staff who work remotely at least some of the time. Remote access to an on-premise server requires a VPN, which adds complexity, another potential point of failure, and performance overhead. Hosted desktop works from any internet connection, on any device, with no VPN required.

Scalability

Adding a user to a hosted desktop takes minutes. Adding a user to an on-premise setup may require additional licences, additional server resources, and potentially additional hardware if capacity is tight. In a growing practice, this friction has a real cost in time and management overhead.

The IT management burden

On-premise infrastructure needs someone to manage it. Patches, updates, backup monitoring, hardware health checks — either you pay an IT provider to do this, or someone in the practice does it. In most small practices, "someone in the practice" means a partner or senior member of staff spending time on IT administration that could be spent on billable work.

Key questions before you decide

• What is the true age of your current server, and when is it due for replacement?
• Are you running Windows Server 2016 or earlier? (End of life: January 2027)
• What are you currently paying for backup, security, and support — combined?
• How much downtime did you experience in the last 12 months, and what did it cost in staff time?
• Do any of your staff work remotely? How reliable is that setup?
• When your practice grows, how quickly can you add a new user to your current setup?
• If your server failed today, how long would recovery take — and who would do it?

The answers to these questions will tell you more about the right decision for your practice than any headline cost comparison.