The Economics of the Cloud
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6 April 2011
There is no denying that the interest in the Cloud is intensifying. Being a leading provider of Cloud Services, we are often asked about the economics of moving into the cloud vs retaining on premise IT.
There are several types of cloud solution evolving, Public, Private, single and multi-tenanted so an exact comparison is difficult and is normally undertaken on a case by case basis. The comparison below is a customer of ours with 50 users. The Exchange 2003 server was over 3 years old, unreliable and out of warranty, so needed replacing. The Windows 2003 server was still in warranty and was used for file storage of 100 GB of data, which was backed up offsite using online backup.
The challenge was to understand whether it was technically feasible to move all the data into the Cloud and which solution to use. In this instance we chose Microsoft’s Business Productivity Online Suite (BPOS) Cloud Solution, as initially it seemed most appropriate. BPOS Email it seemed was a good fit as the users already used the Outlook client and all that was needed was to repoint Outlook to the BPOS Exchange Service. Data consisted of Word and Excel documents as well as a few pictures stored in a hierarchical file structure on the server. Quite a considerable amount of the data was very old and no longer used, so approximately 50GB was able to be archived and stored on local storage.
The success of hosting and accessing the data would be based on the resilience and speed of the internet connection. The existing ADSL2+ Line together with a backup line was going to be fast enough, so based on the cost savings a decision was made to migrate to Microsoft BPOS in the Cloud.
Moving to Microsoft’s Cloud also provided additional benefits and cost savings: - BPOS includes Anti-Virus and Anti-Spam so SW Maintenance costs were reduced
- The cost of electricity to power the on premise servers was removed
- BPOS includes a 99.9% Uptime Service Level and built in Disaster Recovery so the need for online data backup was eradicated
- On Premise Server Support was no longer needed reducing support costs
- Users were able to work remotely without the need for a Virtual Private Network
- Minimal capital expenditure was required and no additional bank lending or finance needed
- The overall project cost was reduced by over £5,000
| Costs for an on premise solution | Costs for a Microsoft BPOS Cloud | | Capital Expenditure | | | HW | £ 5,000.00 | HW | £ - | | SW | £ 3,000.00 | SW | £ - | | Services | £ 2,400.00 | Services | £ 2,400.00 | | Total | £ 10,400.00 | Total | £ 2,400.00 | | 36 Month cost | £ 288.89 | 36 Month cost | £ 66.67 | | Operational Expenditure/month | | | Electricity | £ 50.00 | Electricity | £ - | | Online Backup | £ 100.00 | BPOS x 50 | £ 335.00 | | SW Maintenance | £ 50.00 | Additional storage | £ 83.00 | | Support | £ 250.00 | Support | £ 100.00 | | Total | £ 450.00 | Total | £ 518.00 | | Total Expenditure | £ 738.89 | Total Expenditure | £ 584.67 | | 3 year cost | £ 26,600.00 | 3 year cost | £ 21,048.00 |
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