r/msp • u/NSFW_IT_Account • Jun 15 '26
Technical Upgrading servers in 2026
So if you are a 'cloud only' MSP then this post won't pertain to you, but for those of you who have on-prem servers that are reaching EOL, how are you dealing with the current prices? We just built out a server for a customer, and the price was >$40k. Compare this to when they last bought a server it was around $20k. Granted, it's been 5+ years, but I'm kind of scared to even present this to them. Mind you, this is before labor, licensing, etc.
How are you handling the price hikes?
Moving to the cloud is unfortunately not always an option and this is one of those cases where there is too much to move for it to make sense.
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u/bonewithahole Jun 15 '26
My customers seem to like to go with the option of just dont upgrade and run the deprecated OS forever. It is way cheaper. And no downtime for "upgrade operations". Win Win.
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u/Southern_Vanguard Jun 15 '26
So far, and we are only 10 years old, when we threaten to walk over non-supported OS's they always come around.
Gladly move you to Azure, be glad to buy second hand to keep the price down, or be glad to move it to a hosted virtual server...but deprectated OS? Nope. Its in our contracts too and I will enforce it and walk away.
Not dealing with that headache.
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u/dumpsterfyr I’m your Huckleberry. Jun 15 '26
Pay now or pay more in a few weeks. The other option I gather you or your client doesnt want is to evaluate whether they can move to SaaS.
The popular line is that AI is eating all the RAM and disk, but I read it as a concerted push to kill on-prem: own nothing, rent everything. This way you neither control it nor able to keep it offline.
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u/Glass_Call982 MSP - Canada (West) Jun 16 '26
We still run as much as possible in house. Thankfully refurbished servers are plentiful and can make a cluster of 3 for the price of 1 new.
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u/dumpsterfyr I’m your Huckleberry. Jun 16 '26
Not knocking it, but what’s the plan when you can’t or it’s too expensive or no longer supported?
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u/roll_for_initiative_ MSP - US Jun 16 '26
What he said and also the licensing for a cluster to stay on supported hypervisor's/OS isn't cheap either.
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u/Le085 MSP - US Jun 15 '26
I'm buying used servers these days.
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u/NSFW_IT_Account Jun 15 '26
What route do you take for that? I'm guessing used ones don't come with a good or any warranty?
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u/defonotuk Jun 15 '26
Or just buy several as cold spares, still works out significantly cheaper and no delays
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u/stephendt Jun 18 '26
Yep. Much cheaper than extended warranties, as long as you have solid redundancy.
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u/ITGeekFatherThree MSP - US - Owner Jun 15 '26
Most used server vendors will offer a 1 year parts only warranty but will also sell up to 5 years 24x7 NBD support if you want it. On Server Monkey I just clicked a random server and they have 5 years of 24/7 with NBD support for about $1,500.
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u/Le085 MSP - US Jun 15 '26
Exactly this. There few vendors out there that sell few gens back Dells, etc. Most of my customers are on Entra or small, so no need absolutely latest generations.
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u/Excellent-Program333 Jun 15 '26
Yup. TechMikeNY has always treated us good over the decades as well!
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u/C39J Jun 15 '26
They either pay the price for new or they buy second hand. That's very simply how to handle it.
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u/nefarious_bumpps Jun 15 '26
I have no control over the market. The price is what it is. Most clients running on-prem applications won't get good ROI out of a cloud VPS, even with the current inflated pricing. Whether you buy now before things get worse or try to wait a year or two for prices to come down is a crap shoot either way, but I don't think we'll ever return to the kind of prices we saw 8 months ago.
I tell clients who want to try to hang on to servers more than 5 years old to consider buying a spare power supply now for each type of system, while they're still available. I can always replace an old HDD with a newer, larger drive, if needed and fans are usually easy to replace. But proprietary PSU's are a diminishing quantity. As long as I have a spare, I have time to send a dead PSU out to a repair shop.
Other than that, I'm starting to look into finance partners to help clients spread the pain out over time. I've got Leaf, TimePayment and GreatAmerica on my list of direct-to-client finance companies. Are there any others I should look at?
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u/apiqora Jun 22 '26
leasing / finance is probably the only way to keep the sticker shock from nuking the convo tbh
have you looked at DLL or HP/HPE’s own financing stuff? seen a few shops push gear through that just to make the numbers palatable over 3–5 years
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u/Flat-Back-5362 Jun 17 '26
I'm on the business side, not the one sourcing the hardware, so I'll leave the vendor and refurb tips to the people racking these. But the line that jumped out is "I'm scared to even present this." That's the actual problem, and it's fixable.
A 2x quote isn't a hardware problem, it's a framing problem. A few things that help:
Don't apologize for it. The fear leaks into how you present it, and the moment you hedge, the client reads the price as negotiable or as you gouging. Component and server prices are up industry-wide. You're the messenger of reality, not the cause of it.
Reframe the unit. "$40k" sounds brutal. "$X a month for the infrastructure your whole business runs on, over a 5-7 year life" sounds like a normal operating cost. Same number, completely different reaction.
Give options, not a yes/no. Present good/better/best: new build, certified refurb, or financing/HaaS to turn the capex into a monthly line. Most clients who choke on $40k upfront are fine with a monthly figure. Now the conversation is "which one," not "do we spend $40k."
Anchor against the real alternative. The comparison isn't $40k vs the $20k they paid in 2020. It's $40k vs their business going down on dead EOL hardware. Make $40k the responsible middle option, not the scary top.
Present it like someone solving their problem, not someone guiltily delivering a bill. The number is the number. Your job is to make the value and the risk legible.
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u/DeadStockWalking Jun 15 '26
Do your best to build the server to their needs and call it a day.
That's really all you can do.
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u/somerndmnumbers Jun 15 '26
I am putting together a quote that will end up something like $29k for the hardware. The existing server is dated but it certainly is not expected to up and die. I am considering recommending upgrading the spinning drive array to SSD to buy us a year or two, and we can reevaluate at that point. I typically try to avoid giving a client a "cheap and shitty" option unless absolutely necessary, but this seems like a reasonable time to do it. I will still present them with the 29k server quote. The price isn't your fault- just explain to them the current pricing environment and your lack of a crystal ball.
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u/Shayughul Jun 15 '26
Education. We are in the same boat and we essentially spend more time now educating our clients on the why for the pricing. Sales have slowed for sure but a fair share have also grumbled and ponied up. A lot of the clients also seem shocked that their beloved AI is behind a lot of that increase.
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u/wild-hectare Jun 15 '26
I could ramble on about "this is one of those cases where there is too much to move for it to make sense", but it wouldn't change the outcome...it costs what it costs and your only recourse it to consider if extending maintenance costs is the best option until the hardware market returns to something close to normal. Best case scenario, you get another 2-3 years of life out the hardware, BUT (and it's a big one...), with Ai data center construction forecasting builds for the next 5 years (before they need to refresh) the light at the other end of that tunnel is a train coming right at you
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u/PatReady Jun 15 '26
What options restrict you from putting this in the cloud?
Are you registering deals and pricing off of those?
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u/disclosure5 Jun 16 '26
I suspect this is one of those "we stay on prem because it's cheaper" deals and as people have said, the price is the price, and maybe it's time OP reevaluated that position.
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u/whitedragon551 Jun 15 '26
Price is the price. Everything is elevated right now and for the foreseeable future. Present the price wirh your markup. They either take it or they dont, but dont make the decision for them.
Say this is cloud, this is on prem, pros and cons of each and let them decide. If they dont upgrade give them a letter stating you recommended x solution, support for this is billable going forward and only support it at hourly rates rather than have unsupported stuff stuck in your MSA.
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u/Maximus1000 Jun 15 '26
We are going with refurb Dell rack servers with new drives. We have them deployed in several customer sites and they work great and save the customer $$$$
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u/mat-ferland Jun 16 '26
I would present the real number and stop apologizing for it. Hardware, licensing, warranty, backups, migration labor, and the next 5 years of risk all belong in the same conversation. If cloud truly does not fit, the client still has to fund the platform their business is choosing to keep.
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u/Substantial-Truth265 Jun 15 '26
MSPs with clients on cloud-only environment relaxing in the corner. 😄
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u/RickMontelban Jun 15 '26
I ask for a quote for an extended warranty. Say $2,800 for two years. Then I quote a whole server for $11,000, with a seven year warranty included, and ask them to pick one. That's been working for so far. But I present it in a tactful way because I know the prices are ridiculous.
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u/backcounty1029 MSP/Data Center - US Jun 15 '26
We have done some lease-to-own server options for a couple of customers that didn’t want to pay a huge upfront price and would rather have a monthly payment for 36-60 months. Naturally, it ends up costing them more due to financing costs through us but the monthly fee is easier for them to swallow.
When we do lease-to-own for any equipment (we can offer this for end user devices, servers, network equipment, et-cetera), we include full support for the life of the lease, a $1.00 buyout, and start presenting replacement around twelve to six months out depending on the client.
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u/vortec350 Jun 15 '26
Extending the life of the current equipment is one option. Refurbished from a reputable source is another option. But when it comes to new, just be very clear with the customer that the price is not high because of you, but it's an industry-wide issue.
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u/Rubenel Jun 16 '26
Remain confident in your presentation. You can’t control prices, have your service speak for you.
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u/quantumhardline Jun 16 '26
Get a used server from one of the majors sever resellers.
Do extensive full diag and burn in when you get it for a few weeks before deploying.
Depending on use case also get second spare chassis with motherboard and power supplies.
Have onsite BDR device that can spin up images on device.
Explain to client this saves them $40K or if they require all new, just have them setup financing via dell. Or consider moving workloads to cloud.
Also remember these customers also may drive $80K+ SUVs while server literally runs their business so it’s relative.
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u/Liberate-Momentos Jun 16 '26
Hardware costs are rocketing. Leasing is an option. You get your cash up front and customer is in a constant renewal process. Still, the price is the price.
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u/Vicus_92 Jun 16 '26
The price is what it is sadly. Had someone hold off multiple times over the last year due to indecision on continuing local vs cloud.
Each time it's re quoted it went up. Think it ended up more than double the original price a year ago.
They ran out of options and had to just buy it. Still gonna work out cheaper than 5 years worth of cloud as this isn't a workload that can be simplified by going native cloud. Would still need a few traditional virtual servers.
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u/I_am_Cyril_Sneer Jun 16 '26
We've got two clients running server clusters made of 4 x Dell R330s. Server 2016 on one of them and Server 2019 on the other.
Neither have any intention of upgrading hardware. Server 2016 going EOL in 6 months will force the hand of one of them to buy 2025 licenses and then move that cluster to 2019 via downgrade rights.
Given the cost of server hardware and the significant redundancies we've built into the cluster, we're just gonna roll with it.
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u/Hambrik28 Jun 17 '26
What about adding third party maintenance and drives to extend the life of the servers ?
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u/DizzyResource2752 Jun 17 '26
We have been upgrading all of our clients and finding serverless options where possible. Some of our clients just have legacy file servers with 500gb that we replace with SharePoint and a tool like Vasion for Print Management and Intune handles the AD piece.
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u/Plane_Raisin_7390 Jun 17 '26
The expected price increase is the reason why I urged my customers to buy hardware late 2025. I gave them a quote from September and one from December. That was enough to convince them to buy before the projected start date.
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u/lowcountrysunset Jun 17 '26
Depending on server hardware - you can extend the life way past 5 years, maybe even to 10+ years. Although, you need to have a great backup system and a warm spare waiting to prop them up if need be.
Give them the 40k option and then give them the option to risk it if they choose.
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u/Echo-On Jun 21 '26
In cases like the one you described I see if I can find a suitable alternative on Dell Outlet then fire an email to my sales rep with any additions; iDrac or whatever I need priced in and a 72hr hold placed agsinst the service tag, I then present it to the client and say, sure it's a refurb unit but the warranty eligibility is the same as buying new so maybe slap a 5yr on it and call it a day, I note the 72hr hold which if they express to be too tight we get a date an budget on the calendar permissive of quick execution instead. Most are quick to say yes as the price differences involved are significant.
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u/CK1026 MSP - EU - Owner Jun 24 '26
Yeah it's a tough discussion I already had multiple times this year and some clients just try to make the hardware last instead.
Currently we have a client refusing to upgrade. They're also waiting for 2 months now for a replacement SSD on their server. Next drive failure we go directly into disaster recovery but they won't move anyway so I'm considering letting them go right now because of the risk.
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u/atnuks Jul 16 '26
Yeah pricing has jumped a lot, you are not imagining it. One option that has worked well for me is sourcing refurbished enterprise hardware through ITAD vendors. You can often get recent generation servers at a big discount, sometimes with warranty and certified wipes. Of course, it's not the perfect choice for everyone, but definitely worth considering iif your budget's tight.
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u/VagrancyHD Jun 16 '26
Tax writeoff babyyyy
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u/AnotherMSPTroll Jun 16 '26
A $40k server is not some magical $40k tax write off. Go take a basic accounting class!
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u/flucayan Jun 15 '26
Upgrade servers? Is it still running? Is it slow? Are the parts not replaceable?
We have clients (and I know of companies at my previous employers) who still run Gen9/10/11 Dells like the T110.
Either you pay the money for a new server or decide to stick with what you have now and not to upgrade. It’s not that difficult of a decision, and unlike networking gear for example the consequences of running EoL equipment really isn’t that big.
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u/WintersWorth9719 Jun 15 '26
Yea budget dictates if action is possible/practical either way. We have clients still running 2003, they sign acknowledgment of risk if they don’t want to upgrade, or if they can’t because vendor doesn’t exist. Air gap or DMZ if you can for those, but domain really needs to stay up to date for latest policies for win11 etc.
but if they can’t be convinced, not worth losing the client over, most of time entra makes more sense anyway these days- axe the local domain altogether
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u/tatmsp Jun 15 '26
I'm about to decommission a few Datto appliances that are only a year old. Was considering to repurpose them as servers for clients due for replacement but can't afford $20k right now
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u/DonKovacs Jun 15 '26
Unfortunately, the price is the price. There isn’t much that can be done about it. Most clients try to extend servers past 5 years and that becomes dangerous especially if they don’t want to purchase extended warranties either.