Team MCP Servers - From Personal Tools to Shared Infrastructure

I should say upfront: for single-user utilities, many or even most of the things people build as MCP servers should probably just be skills. A skills file lives in the repo, ships with the code, and progressive disclosure works. You don’t need a server running to give Claude a few custom commands.

But there’s a specific case where skills files stop making sense and MCP servers start making a lot of sense: when you’re sharing tools, prompts, and resources across a team. And in that case, the question isn’t just “should I use MCP” but “should I host it.”

Where Local Breaks Down

Local MCP servers are personal by nature. That’s their strength and their limitation. When you want to share what you’ve built with a team, you run into a distribution problem that should feel familiar to anyone who’s ever maintained internal tooling.

You need to get the server running on everyone’s machine. You write install docs. Some people are on Mac, some on Linux, a few on Windows. Someone’s Node version is wrong. Someone else never saw the Slack message about the update. Three months later, half the team is on v1.2 and the other half is on v1.0, and nobody’s sure which prompts are current.

This is the same problem that plagues internal CLIs, shared scripts, and skills files. It’s the “update 40 repos on 100 developer machines” problem. It’s the “get 20 marketing people to go click around and upload something” problem. It technically works, but the maintenance burden scales with every user you add.

Why Hosted Changes the Equation

A hosted MCP server flips the model. Instead of distributing software to users, you deploy a service and give them a URL. Users add one config block and authenticate:

{
  "mcpServers": {
    "internal": {
      "type": "http",
      "url": "https://mcp.internal.yourcompany.com"
    }
  }
}

That’s the entire setup from the user’s side. From there, the advantages compound.

Updates are instant. When your platform team pushes a change to the hosted server, every connected user gets it on their next request. No PRs to skills files across dozens of repos. No Slack messages begging engineers to run npm update. No walking anyone through a config change. Deploy once, everyone benefits.

Auth works the way auth should. MCP has OAuth support baked into the protocol, so users authenticate once and the server inherits their existing permissions. If someone can’t access a resource through your normal systems, the MCP server won’t expose it either. You’re not distributing API keys or managing per-user secrets on individual machines. Atlassian’s remote MCP server is a clean example of this: connect, authenticate in the browser, done.

Secrets stay server-side. Database credentials, API keys, and internal tokens live on the server where they belong. Users connect with their own identity; the server uses its own secrets. Nobody has a .env file full of production credentials on their laptop.

Non-technical users can actually use it. This is the one that matters most in practice. A local MCP server requires someone to install software, manage dependencies, and troubleshoot when things break. A hosted server requires someone to paste a URL and log in. That’s a fundamentally different ask, and it’s what makes MCP servers viable for teams beyond just the engineering org.

Local Still Has Its Place

I’m not saying local MCP servers are dead. They’re great for development, for personal productivity tools, and for things that genuinely need to stay on your machine (working with local files, offline access, fast iteration on a new server). I still run several locally.

The right pattern for most teams is probably a hybrid: local for building and testing, hosted for production. That mirrors the traditional dev/prod split, just applied to AI tooling.

The Infrastructure is Ready

This would have been a harder sell a year ago when the hosting story was still rough. Today, Cloudflare Workers, Google Cloud Run, and Azure Functions all have first-class MCP server support. Pick whichever matches your existing stack. The deployment part is genuinely straightforward.

The harder question is organizational: who owns the hosted server? In most cases, it’s whoever already maintains internal developer tooling or platform infrastructure. It’s the same job (build tools, manage access, push updates) with a better delivery mechanism.

If you’re still running team MCP servers locally, it’s worth considering the switch. The gap between “works on my machine” and “works for the whole team” is exactly what hosting solves.