Total Cost of Ownership For Cloud Computing
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Vic Levinson
May 18, 2013, 7:04:52 PM5/18/13
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Article Title: Total Cost of Ownership For Cloud Computing
Author: Vic Levinson
Word Count: 532
Article URL: http://www.isnare.com/?aid=1840738&ca=Computers+and+Technology
Format: 64cpl
Contact The Author: http://www.isnare.com/eta.php?aid=1840738
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Sometimes it seems like small and medium businesses (SMBs) and mid-market enterprises can�t catch a break. Even before the recession struck, many were struggling to compete in increasingly competitive and demanding business environments. Keeping up with these demands and trends� from fast-evolving technologies to changing customer expectations to new, sometimes global, competition�made life increasingly challenging for SMBs. Then the recent global recession hit hard, and in many cases, limited resources and reserves made it tough for SMBs to bounce back.
Even as we emerge from the recession, these ongoing pressures and fiscal uncertainties continue to weigh on SMBs. Consequently, Total Cost of Ownership (TCO) is a top consideration when evaluating potential business application options.
The good news is that cloud computing has come of age, and is providing SMBs with access to computing resources and capabilities that were once out of reach. More businesses are determining that cloud-based services, especially software as a service application offerings, can provide SMBs with more powerful and capable solutions while decreasing capital outlays and operational costs.
Cloud computing eliminates the need for individual companies to buy, deploy and maintain IT infrastructure or application software. In the cloud computing model (also known as software-as-a service,or SaaS), the vendor takes responsibility for deploying and managing the infrastructure servers, operating system software, databases, data center space, network access, power and cooling, etc.) and processes (infrastructure patches/upgrades, application patches/upgrades, backups, etc.) required to run and manage the full solution. Because cloud vendors manage all of their customers on a single instance of the software, they can amortize infrastructure-related costs over thousands of customers. This results in substantial economies of scale and skill, reducing the total cost of ownership (TCO) for customers who deploy business management solutions.
Factors to Consider
Cloud solution cost advantages are significant across all deployment sizes, but taper somewhat as the number of users increases
Application software costs (subscription and support fees) account for roughly 85% of the total solution cost in the cloud model. In the on-premises model, application software costs (including the upfront license fees and annual maintenance fees) constitute just 23% of the total
solution cost.
Customers do not incur any direct IT infrastructure and related management costs with the cloud model because subscription fees encompass these costs. In the on-premise deployments, IT infrastructure (hardware, software, maintenance and ongoing management of the infrastructure) costs range from 51% (in a 50-user scenario) to 45% (in a 200-user scenario) of the total solution cost over four years. This category accounts for the biggest difference between the TCOs of the two models.
Because of these factors, it is important to do a complete total cost of ownership analysis before making a decision on whether or not to maintain applications on premise or migrate them to the cloud. Please keep in mind that certain line of business applications or customized applications may not migrate well. A competent cloud advisor can assist you in evaluating the total cost of ownership among a variety of cloud providers and assist you in evaluating which applications should migrate or be virtualized in the cloud.
About The Author: For over 20 years, I have been providing communications and IT solutions for small and medium business enterprises. My mission has been to provide accurate and timely interpretations of how these developments can effect a business's bottom line. More at http://www.primetelecommunications.com.
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=1840738
*********************** ARTICLE END ***********************
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Message delivered directly to members of the group:
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*****************************************************************
Please consider this free-reprint article written by:
Vic Levinson
*****************************
IMPORTANT - Publication/Reprint Terms
- You have permission to publish this article electronically in free-only publications such as a website or an ezine as long as the bylines are included.
- You are not allowed to use this article for commercial purposes. The article should only be reprinted in a publicly accessible website and not in a members-only commercial site.
- You are not allowed to post/reprint this article in any sites/publications that contains or supports hate, violence, porn and warez or any indecent and illegal sites/publications.
- You are not allowed to use this article in UCE (Unsolicited Commercial Email) or SPAM. This article MUST be distributed in an opt-in email list only.
- If you distribute this article in an ezine or newsletter, we ask that you send a copy of the newsletter or ezine that contains the article to http://www.isnare.com/eta.php?aid=1840738
- If you post this article in a website/forum/blog, ALL links MUST be set to hyperlinks and we ask that you send a copy of the URL where the article is posted to http://www.isnare.com/eta.php?aid=1840738
- We request that you ask permission from the author if you want to publish this article in print.
The role of iSnare.com is only to distribute this article as part of its Article Distribution feature ( http://www.isnare.com/distribution.php ). iSnare.com does NOT own this article, please respect the author's copyright and this publication/reprint terms. If you do not agree to any of these terms, please do not reprint or publish this article.
*****************************
Article Title: Total Cost of Ownership For Cloud Computing
Author: Vic Levinson
Word Count: 532
Article URL: http://www.isnare.com/?aid=1840738&ca=Computers+and+Technology
Format: 64cpl
Contact The Author: http://www.isnare.com/eta.php?aid=1840738
Easy Publish Tool: http://www.isnare.com/html.php?aid=1840738
*********************** ARTICLE START ***********************
Sometimes it seems like small and medium businesses (SMBs) and mid-market enterprises can�t catch a break. Even before the recession struck, many were struggling to compete in increasingly competitive and demanding business environments. Keeping up with these demands and trends� from fast-evolving technologies to changing customer expectations to new, sometimes global, competition�made life increasingly challenging for SMBs. Then the recent global recession hit hard, and in many cases, limited resources and reserves made it tough for SMBs to bounce back.
Even as we emerge from the recession, these ongoing pressures and fiscal uncertainties continue to weigh on SMBs. Consequently, Total Cost of Ownership (TCO) is a top consideration when evaluating potential business application options.
The good news is that cloud computing has come of age, and is providing SMBs with access to computing resources and capabilities that were once out of reach. More businesses are determining that cloud-based services, especially software as a service application offerings, can provide SMBs with more powerful and capable solutions while decreasing capital outlays and operational costs.
Cloud computing eliminates the need for individual companies to buy, deploy and maintain IT infrastructure or application software. In the cloud computing model (also known as software-as-a service,or SaaS), the vendor takes responsibility for deploying and managing the infrastructure servers, operating system software, databases, data center space, network access, power and cooling, etc.) and processes (infrastructure patches/upgrades, application patches/upgrades, backups, etc.) required to run and manage the full solution. Because cloud vendors manage all of their customers on a single instance of the software, they can amortize infrastructure-related costs over thousands of customers. This results in substantial economies of scale and skill, reducing the total cost of ownership (TCO) for customers who deploy business management solutions.
Factors to Consider
Cloud solution cost advantages are significant across all deployment sizes, but taper somewhat as the number of users increases
Application software costs (subscription and support fees) account for roughly 85% of the total solution cost in the cloud model. In the on-premises model, application software costs (including the upfront license fees and annual maintenance fees) constitute just 23% of the total
solution cost.
Customers do not incur any direct IT infrastructure and related management costs with the cloud model because subscription fees encompass these costs. In the on-premise deployments, IT infrastructure (hardware, software, maintenance and ongoing management of the infrastructure) costs range from 51% (in a 50-user scenario) to 45% (in a 200-user scenario) of the total solution cost over four years. This category accounts for the biggest difference between the TCOs of the two models.
Because of these factors, it is important to do a complete total cost of ownership analysis before making a decision on whether or not to maintain applications on premise or migrate them to the cloud. Please keep in mind that certain line of business applications or customized applications may not migrate well. A competent cloud advisor can assist you in evaluating the total cost of ownership among a variety of cloud providers and assist you in evaluating which applications should migrate or be virtualized in the cloud.
About The Author: For over 20 years, I have been providing communications and IT solutions for small and medium business enterprises. My mission has been to provide accurate and timely interpretations of how these developments can effect a business's bottom line. More at http://www.primetelecommunications.com.
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=1840738
*********************** ARTICLE END ***********************
- To distribute your articles go to http://www.isnare.com/distribution.php
- For more free-reprint articles go to http://www.isnare.com
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