Cloud Infrastructure – Benefits and Potential Cost Savings

The Value Proposition – Benefits and Potential Cost Savings for Using Cloud Infrastructure

It seems that the overall cost for using cloud infrastructure and desktops as a service is the largest concern for potential buyers of this technology. For some, the annual cost seems a little high, for other they can’t imagine spending that kind of money for their IT needs. In their mind, they spend a big chunk of money up front and see their IT guy about once a month. So, the idea of having a fix cost for all of their IT infrastructure and support is overwhelming for some. Let’s break down the process to understand the benefits and potential cost savings that this technology has to offer.

When a company starts up, the main focus is making money. To get this done, it requires communication and information, as well as the efficient delivery of goods and/or services. In order to communicate, account for operations, provide customer service, and almost any other major business functions, you need computers. So, the need for IT is present from the first day. Employees are hired and IT equipment and phones are purchased and you are off to the races. In the beginning, purchases were made from a tight capital budget. In other words, just get the minimum and get it as cheap as you can.

This method of operation runs okay for a few years, but now your business grows and your IT guy keeps telling you that it’s time to upgrade. Or you need more hardware and software in order to meet your business initiatives. So, before you know it, you have spent some serious money on your IT system over the years and you really don’t know how much.

The questions that you need to ask yourself is “do I really want to keep having to spend large amounts of money year after year just to tread the IT waters.” Or, do I exploit new technology that provides reliability, flexibility, and scalability my business for a fixed monthly cost. Enter the next generation Internet computing and change the cost of delivering the IT that your business needs to run.

Let’s break down the IT infrastructure costs for an average 10 employee business, and compare the old tech and new tech:

A. Traditionally, you first buy your on-premises infrastructure (servers and workstations).

• $6,000 – Server Hardware
• $2,000 – Operating system with Microsoft client licenses
• $3,600 – Annual replicated on and offsite backup (about the price of buying the software)
• $10,000 – Workstation, Monitors, Office Suite, Anti-Virus
• $4,000– Installation cost

B. The initial infrastructure startup cost is $26,000, and you get to spend that every few years.  Let’s say that you want to get 4 years out of this system before you upgrade.

• $26,000 divided by 4 = $6,500 per year
• Support costs would average about $10,000 per year
• Total cost using the conservative side is $16,500 per year
• The monthly cost is  $1,375
• Repeat 1 and 2 in year 5

C. Now let’s compare the traditional IT costs to cloud-based IT infrastructure in Cloudspace USA.

• $3,348 – Annual cost for Virtual Private Cloud (VPC) including 500gb storage, Domain Controller, firewall, SSL encrypted remote access, backups, 7×24 infrastructure support
• $11,400 – Annual cost for 10 Cloud Desktops with MS Office, Windows, mailbox, antivirus, spam filter, 7×24 infrastructure support
• $7,000 for 10 workstations (no need for MS Office or powerful PCs with cloud networking)
• $3,000 for installation (basically the same in cloud or on site) $7000 on work stations & $3000 = 10K divided by 4 yrs = $208.33 MRC over 4 yr
• The annual cost for your IT infrastructure is $17,248 for the same 4 year period
• IT infrastructure support is included
• The total monthly cost is @1,425.33

D. Your cost will increase by $50/month.  For that you get:

• You can access it from anywhere
• All communications are encrypted
• Your risk of being down is reduced by being in a hardened facility with multiple power grids and Internet connections
• Your data is protected by backups that run every hour
• Your systems run faster and cleaner with  higher quality hardware and more redundancy
• Infrastructure support is included
• You use the latest Microsoft software or whatever version works best for you
• There are no capital expenditures in year 0 or year 5
• No installation costs in year 5 for a new infrastructure

Cloudspace USA offers cloud-based IT infrastructure as a service. Contact us today for more information on how we can help your company grow and save money.