The Hidden Cost of the Cloud: Why Businesses Are Returning to NAS
For the past decade, the prevailing narrative across the IT industry has been simple: move everything to the cloud.
Businesses were promised agility, lower maintenance overheads, and predictable monthly expenses. For email, real-time collaboration, and everyday document sharing, Microsoft 365 and SharePoint delivered precisely that.
However, a quiet shift is taking place across businesses throughout the UK. As data estates balloon with high-resolution media, legacy archives, CAD files, and multi-year project backups, organisations are experiencing severe monthly sticker shock.
Recently, multiple clients have approached us at System Plus asking for dedicated Network Attached Storage (NAS) implementations specifically to pull data off SharePoint.
When cloud fees transition from a manageable operational expense into an uncontrollable drain on profit margins, businesses aren’t looking backwards out of nostalgia, they are making a pragmatic, financially driven pivot through necessity.
The True Cost of Microsoft 365 Overage
Microsoft 365 provides each organisation with a baseline pooled storage allocation in SharePoint: 1 TB plus 10 GB per licensed user.
For a 20-person business, that provides roughly 1.2 TB of pooled space. While that sounds generous for standard spreadsheets and Word documents, businesses that handle design assets, photography, architectural drawings, or historical project folders breach that ceiling remarkably fast.
Once you exceed your tenant’s pooled limit, Microsoft charges extra storage at roughly 18p per gigabyte, per month (plus VAT).
That figure sounds negligible in pennies, but storage does not scale in gigabytes, it scales in terabytes.
The Real-World Maths
| Excess Storage Required | Monthly Cost (@ £0.18/GB) | Annual Ongoing Cost |
| 1 TB (1,000 GB) | £180.00 | £2,160.00 |
| 2 TB (2,000 GB) | £360.00 | £4,320.00 |
| 5 TB (5,000 GB) | £900.00 | £10,800.00 |
| 10 TB (10,000 GB) | £1,800.00 | £21,600.00 |
Over a standard three-to-five-year hardware lifecycle, leaving 5 TB of historical or bulky data sitting on SharePoint equates to over £32,000 to £54,000 in storage line items alone. You are paying month after month to store static files that your team may only touch once a quarter.
The NAS Alternative: One-Off Investment vs Perpetual Rent
A commercial-grade Network Attached Storage unit (such as a 4-bay or 6-bay Synology or QNAP system) fitted with enterprise-grade drives in a RAID configuration represents a capital expenditure rather than a perpetual subscription.
- Hardware & Disks: An enterprise 4-bay NAS with 16 TB to 24 TB of usable, redundant storage typically costs between £1,200 and £2,200 upfront, depending on drive speed and redundancy tiers.
- Setup & Configuration: Professional installation, network segmentation, and secure user permissions require a modest one-off setup fee.
- Ongoing Running Costs: Power consumption for a typical modern 4-bay NAS running 24/7 amounts to around £60 to £100 per year.
The Break-Even Point
If a company is currently paying for just 2 TB of excess SharePoint space (£4,320/year), an on-premises NAS deployment can achieve a complete return on investment in less than 6 months. Every month thereafter represents pure operational savings.
Cloud vs On-Premises NAS: Weighing the Trade-Offs
Neither solution is a silver bullet for every workload. Deciding where data lives requires balancing flexibility against ongoing liability.
SharePoint / Public Cloud Storage
- Pros:
- Seamless remote access: Accessible from any browser, phone, or laptop without needing a VPN.
- Real-time collaboration: Multiple users can co-author documents simultaneously in Word, Excel, and PowerPoint.
- Zero local hardware: No on-premises footprint, drive failures to swap, or local power dependencies.
- Cons:
- Punitive overage pricing: 18p/GB/month makes large data sets financially unviable.
- Bandwidth bottlenecks: Opening multi-gigabyte design, video, or database files over domestic broadband connections causes workflow lag.
- Subscription lock-in: Data growth directly correlates to escalating fixed operational overheads.
On-Premises NAS Storage
- Pros:
- Zero monthly storage rent: Buy the capacity once, own it outright.
- Gigabit local transfer speeds: Working with large files over a local 1 Gbps or 10 Gbps network is near-instantaneous compared to cloud sync.
- Massive capacity for pennies per gigabyte: Expanding capacity simply means replacing a drive or expanding a volume.
- Cons:
- Upfront capital expenditure: Requires initial budget sign-off for hardware.
- Maintenance & lifecycle: Hard drives eventually degrade and require monitoring, firmware patching, and warranty management.
- Disaster recovery responsibility: On-premise hardware must be protected with an automated off-site backup strategy (such as the 3-2-1 backup rule) to guard against fire, theft, or ransomware.
The Pragmatic Middle Ground: The Hybrid Tiering Model
The most successful infrastructure strategies do not treat this as a binary “cloud vs on-premises” choice. Instead, businesses are adopting intelligent data tiering:
- Hot, Active Data Stays in SharePoint: Daily operational spreadsheets, company announcements, team handbooks, and documents requiring live collaboration remain in Microsoft 365, staying well within your included base quota.
- Bulk, Heavy, and Archival Data Moves to NAS: Completed client archives, raw photo/video footage, database backups, and large CAD/engineering drawings are migrated to high-speed local NAS shares.
- Automated Cloud Backup: The NAS itself is backed up to a dedicated, low-cost cold cloud tier (such as Microsoft Azure Blob or Amazon S3 Glacier), which costs fractions of a penny per gigabyte, preserving off-site disaster recovery without the inflated SharePoint hosting markup.
Regaining Control of Your IT Budget
Cloud adoption was meant to bring cost efficiency, not open-ended financial commitment. If your business is seeing monthly Microsoft 365 invoices inch upwards due to storage overages, it is time to audit what you are storing and where.
A dedicated NAS solution does not mean turning your back on modern modern cloud working; it simply means choosing the right storage medium for the right type of data.
At System Plus, we help organisations design balanced, cost-effective hybrid storage environments that keep your team productive without wasting thousands of pounds on idle cloud storage. Get in touch with us today to audit your current storage usage and calculate your potential savings.
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