When comparing on-premise document storage on Windows Servers to a pure cloud-based solution like NetDocuments, the on-premises solution often appears cheaper at first glance. Windows file servers have hardware costs and ongoing support expenses, whereas NetDocuments is sold as Software as a Service (SaaS), meaning you pay a subscription fee.
Over my career in legal IT, I’ve worked with dozens of law firms running various document storage solutions. I’ve seen firsthand the hidden costs of maintaining on-premise servers—from emergency hardware replacements to ransomware recovery efforts. I’ve also witnessed the transformation that happens when firms move to modern cloud-based document management.
To create an accurate picture of the actual cost, I consulted with IT Directors and Managed Service Providers who currently support law firms running on-premise Windows servers. I wanted to ensure these numbers reflect real-world costs, not just theoretical estimates.
Assumptions for This Cost Analysis
I made the following assumptions to create an accurate cost breakdown:
- The Law Firm has 1 Terabyte of storage
- There are 30 total users
- The Law Firm uses a Managed Service Provider (MSP) and not Break-Fix IT
- All the equipment exists on-site and not in a data center
Depending on these variables, your costs might be more or less.
To properly store documents on Windows Servers, you need robust hardware, reliable backups, and ongoing IT support.
The Windows File Server
The Windows File Server is where all your documents reside. For a law firm, this needs to be a proper server—not just a desktop—with redundant hard drives set up in a RAID array for data protection.
- Windows File Server Hardware = $8,000
- MSP Cost to Set Up Server = $2,500
- MSP Cost to Support Server = $300 a month or $3,600 a year
Windows Server Licensing
You need to license Windows Server and Client Access Licenses (CALs) for your users.
- Windows Server Standard License = $1,200
- Client Access Licenses (30 users) = $1,200
- Total Windows Licensing = $2,400
Backup Solution
With documents stored locally at your office, you are responsible for backing up your data. NetDocuments provides peace of mind with its triple-redundant data centers located in the United States. You don’t need to worry about backing up your data if running NetDocuments.
For on-premise servers, you need both local backup (for quick recovery) and off-site backup (for disaster recovery). Most firms use cloud backup services.
- 1 Terabyte cloud backup at $1 per Gigabyte = $1,000 per month or $12,000 a year
- Local backup hardware (NAS) = $2,000
- MSP setup and monitoring = $500
Uninterruptible Power Supply (UPS)
Your server needs battery backup to protect against power outages and ensure graceful shutdowns.
- Enterprise UPS system = $800
- Setup = $200
- Battery replacement (every 3 years) = $300, averaged to $100 a year
Security Software
Your file server needs antivirus and anti-malware protection, plus monitoring tools to detect intrusions or suspicious activity.
- Enterprise endpoint protection = $15 per user per month = $5,400 a year
- Security monitoring tools = $100 per month or $1,200 a year
- Total Security Costs = $6,600 a year
Remote Access Solution (VPN)
In today’s hybrid work environment, attorneys need to access documents from home, court, client sites, and while traveling. This requires a VPN solution.
- Enterprise firewall/VPN appliance = $3,000
- Setup and configuration = $1,500
- Annual licensing and support = $1,200 a year
Not Included in These Numbers
- Power costs to run the server 24/7 at your office
- Cooling costs for proper server room climate control
- Network infrastructure upgrades to support remote access
- VPN client support when users have connection issues
- File permission management time (MSP hours for user access issues)
- Disaster recovery testing to ensure backups actually work
- Ransomware insurance premium increases for on-premise infrastructure
- eDiscovery tools for searching and producing documents for litigation
- Version control software since Windows file shares don’t track document versions
- Document collaboration tools since multiple users can’t edit simultaneously
- Compliance and audit trail tools required for legal and regulatory requirements
Total Annual IT and Operating Costs
Let me break down the annual costs:
- MSP Server Support = $3,600
- Cloud Backup = $12,000
- Security Software = $6,600
- VPN Licensing = $1,200
- UPS Battery Replacement = $100
- Windows Updates and Patches (MSP time) = $1,200
Total Annual Operating Costs = $24,700
Cost per User per Year = $823
Cost per User per Month = $69
Total Hardware and Setup Costs
I’m assuming you will replace your equipment every three years (a conservative estimate—many firms stretch this to 4-5 years, increasing failure risk).
- File Server = $8,000
- Windows Licensing = $2,400
- Local Backup NAS = $2,000
- UPS System = $800
- VPN Appliance = $3,000
- Setup Costs = $5,200
Total Hardware Investment = $21,400
Spread over three years: $7,133 per year
Cost per User per Year = $238
Cost per User per Month = $20
The Total Cost to Run On-Premise Document Storage
$89 per User per Month
That’s right—$89 per user per month just to store documents on a Windows file server. And remember, this doesn’t include:
- The licensing cost for document management software if you want features beyond basic file shares
- Mobile access to documents from smartphones and tablets
- Mac support for attorneys using Apple computers
- Advanced search capabilities to quickly find documents across matters
- Document-level security and permissions
- Audit trails showing who accessed what and when
- Version control to track document changes
- Email management and filing
- Integration with DocuSign and other legal tools
- Matter-centric organization instead of just folders
- Protection from ransomware through immutable cloud storage
- Automatic disaster recovery without tape rotations and off-site storage
- Compliance tools for retention policies and disposition
- Client portals for secure document sharing
The Hidden Costs of Downtime and Risk
Beyond the monthly costs, on-premise servers carry significant risk:
Ransomware: Law firms are prime targets. The average ransomware attack costs $4.5 million, including downtime, recovery, legal costs, notification expenses, and reputational damage. With on-premise servers, you’re responsible for prevention and recovery.
Hardware Failure: Servers fail. Hard drives crash. When your server goes down, how long will it take you to get back up? Hours? Days? Can you afford to miss filing deadlines or be unable to access client files during critical negotiations?
Data Loss: Despite backups, data loss happens. User error, failed backups, corruption—when you manage it yourself, the risk is yours.
Security Breaches: A single security incident can cost hundreds of thousands of dollars in forensic analysis, client notification, credit monitoring, legal fees, and malpractice claims.
The NetDocuments Alternative
NetDocuments is a true cloud-based document management system built specifically for law firms. With NetDocuments:
- No servers to maintain – NetDocuments handles all infrastructure
- Triple-redundant data centers – Your documents are safer than in your office
- Built-in disaster recovery – No backup management needed
- Bank-level security – SOC 2 Type II certified with 20+ years and zero breaches
- Access anywhere – Full mobile apps, web access, seamless integration
- Powerful search – Find documents in seconds, not minutes
- Matter-centric organization – Documents organized by case, not just folders
- Complete audit trails – Know who accessed what and when
- Version control – Automatic tracking of document changes
- Email management – File emails directly to matters
- Integration ecosystem – Works with practice management, Office 365, DocuSign, and more
Making an Accurate Comparison
To make an apples-to-apples comparison between on-premise document storage and cloud-based solutions, you must include all the costs associated with running the infrastructure on-premise. Only then can you accurately weigh the benefits and drawbacks of both options and make the best decision for your firm.
At $89 per user per month—before factoring in risk costs, productivity losses, and missing features—on-premises document storage is neither cheaper nor safer than modern cloud alternatives.
The real question isn’t just about cost. It’s about risk, security, productivity, and peace of mind. Can you afford the downtime when your server fails? Can you recover from a ransomware attack? Can your attorneys find documents quickly enough to serve clients effectively?
For more information about NetDocuments and how it can transform your firm’s document management, click here.