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NAS (Network Attached Storage) vs. Server for Small Businesses

Last Updated on November 6, 2022

For any small business, it is important to have an effective way to store data and share it among employees. Thus, any network with more than 2 or 3 users who need to access the same data should be implementing some sort of client-server relationship. It is common to see small businesses who aren't operating with this setup because they simply don't realize the benefits that a NAS (Network Attached Storage) or server can bring. When it comes to choosing between a NAS or server, the choice depends on several factors.

However, first you must understand the differences between a Server and NAS.

What is a Server?

Windows Server Setup Screen

A server is not dramatically different from a regular personal computer, but it serves an entirely different purpose. The main role of a server is to manage resources on the network. The server will be using a server operating system such as Windows Server, Linux, or Mac OS X Server. A server can fill a number of different roles, all of which manage resources and clients on your local network. Potential server capabilities include:

  • Active Directory (AD) Domain Controller - authenticates and authorizes all users and computers on the network
  • DHCP Server - dynamically assigns IP addresses to devices on the network
  • DNS Server - associates IP addresses with domain names
  • Printing and Document Services
  • File storage, Sharing and Collaboration Tools
  • Establishing User or Device Specific Permissions
  • Running Applications and Databases - applications installed on server that are accessible to clients (accounting software, databases, e-commerce software, email management, etc.)

What is a NAS (Network Attached Storage)?

synology NAS (network attached storage) dashboard

NAS stands for network attached storage. As you can derive from the name, a NAS is attached to a network and stores and serves data. A NAS is specialized to provide data storage and make it easily accessible. A NAS provides a central location to allow for synced folders of data that can be accessed and modified by others on the network. It is also useful for backing up data. In addition to file storage and sharing, NAS devices offer many of the same services that an standard Windows server can, but with more basic settings and less customization. NAS devices also require you to use its own platform-specific applications, rather than choosing from just any third-party software.

Which Device Suits Your Small Business?

To decide whether a NAS or server will best suit your small business, it’s helpful to break down the benefits of each in the following categories:

Functionality and Ease of Use

As was discussed earlier in this post, application servers are more powerful than NAS, as they offer more functionality. Application servers allow you to install third-party software. With a NAS, you are limited to applications you can download on the NAS operating system. For example, to make a Synology NAS into a mail server, you'll need to download the Synology Mail Server app. Servers are more capable and offer more advanced controls over your network services and applications, but also require far more management. The NAS offers less advanced functionality but will not require as much maintenance or configuration. Businesses with a dedicated IT staff need not worry about the configuration and maintenance aspect, but those businesses without IT may opt for the simpler NAS.

Sharing Capabilities

Both file servers and NAS provide a great way to share files across devices on the network with the use of shared folders. Both a server and NAS allow for control over user permissions. User groups can be created that make files only accessible to those who should have access. The server will arguably offer more configuration options in terms of access control and security than a NAS will. However, for the majority of small businesses, the permissions included with a NAS are typically sufficient.

A NAS is also great for sharing folders with clients outside of the network. Using software like Synology's Drive utility, you can easily create a link to the shared folder and send it to clients so that they can access the folder or even configure a syncing relationship as they make changes. A server does not offer this ability. If you are frequently collaborating with clients, you should consider a NAS for its ability to allow outside access to shared folders via the internet. If you only need to collaborate among colleagues, the server will meet all of your needs.


With the difference in functionality, comes a difference in cost. A server contains more powerful hardware and offers more functionality. The tradeoff is that an application server will almost always cost more than a NAS both to initially buy and setup, as well as long-term. Server operating systems also drive up the price because they often require purchasing licenses for the server, and in some cases, licenses (or CALs) for each user or device connecting to the server. On the other hand, most NAS software comes with the NAS device and does not require per user licensing.

What Is the Best for Small Businesses?

We've tested NAS devices for our own use and clients via our former IT Services division from numerous manufacturers including Synology, QNAP, NETGEAR, Western Digital (WD), and Buffalo. In our opinion and from our years of testing, Synology is by far the best NAS for small businesses based on a combination of affordability, features, and reliability. We've also used Synology NAS devices at our Igniting Business office for over a decade. Naturally, you'll need to evaluate your own needs and preferences to find a NAS that works best for you.

Whether you are looking for a starter NAS for a very small team, or a performance NAS for a rapidly growing business, Synology has you covered with numerous options.

Should You Buy a NAS or a Server for Your Small Business?

For a small business, a client-server network setup will improve efficiency and reliability. When choosing a server device, you must consider the needs of your business as well as your budget. For companies seeking higher functionality and can handle the more complicated configuration, maintenance, and higher cost, an application server is the best choice. For those whose are looking for a good file storage and sharing solution, with other basic applications, a NAS is typically a far more affordable option.

Looking for a NAS?  Check out these great options!

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