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Friday, 3 June 2016

Can your small business calculate your cost for cloud services?

If you are a small business looking to compare the costs of your current infrastructure costs versus that of a cloud service provider then you should take a look at this nifty online calculator.

The purpose of this tool is to enable SMEs to compare the cost (in terms of Net-Present-Value (NPV)) of cloud-based solutions to the respective costs of a traditional data center solution that could provide/support similar services as the cloud solution. The tools can help SMEs identify and compare the main cost components of on-premise IT solutions, as well as of respective cloud-based solutions.
Friseur SA is a medium hairdresser SME company with 100 employees across various sites/shops of the company. Friseur SA is considering the deployment of a (CRM (Customer Relationship Management)) system that could facilitate the management of appointments and the running of loyalty programmes. The company is comparing an in-house (on-premise) option that will be hosted in the existing data center of the company, with a cloud based SaaS option. The in-house solution requires the purchase and deployment additional processing power ("Server costs" 2000Euro), along with the licensing of the CRM software. The latter licensing fees amount to 6000 Euro. Furthermore, the in-house deployment incurs an 800 Euro annual fee for maintenance and support («Software maintenance costs (in-house software)»). This fee is not applicable for the first year, where the software will be purchased. On the other hand, the company has the option of obtaining the CRM service as SaaS from a cloud provide at a cost of 300 per month (or 3600 Euro per year) ("Pay-as-you-go-fees").
By entering/placing these values in the TCO calculator, the SME is cost-wise instructed that the datacenter solution is a slightly better option (Datacenter Cost NPV: 11192.33 Cloud Cost NPV: 17978.42). Other factors (like flexibility, need for ubiquitous access, data access and availability) might however be taken into account towards the final selection decision.
MediaPro is an SME company providing services for large publishing houses. MediaPro Pro is typically dealing with the creative design of the layout of newspapers, magazines, journals, for both their printed and electronic versions. MediaPro is monthly producing a large number of design and seeks a 10TB storage data/file storage solution for them. MediaPro is considering two options, in-house hosting or a contract with a cloud storage provider. For the in-house solution the company will have to purchase a cluster of two servers with Networked Attached Storage (1500 ("Server Costs") +1500 ("Storage") = 3000 Euro one-off costs), while it will have to bear a 500Euro cost per year for an IT maintenance contract ("Operational support personnel cost". On the other hand, MediaPro is considering accessing cloud storage from a giant public cloud provider at the cost of 50 Euro per month or 600 Euro per year ("Pay-as-you-go-fees").
By entering/placing these values in the TCO calculator, the SME is cost-wise instructed that the cloud solution is a better option (Datacenter Cost NPV: 4996 vs. Cloud Cost NPV: 2996.4). MediaPro may consider other comparative aspects as well, since the cost difference/gap is not so wide to be considered the sole factor for the company's decision making.

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