Cost Benefit Analyses

Is cloud computing a worthwhile consideration for your organisation?  An important factor to consider is of course cost, not only its quantum but its predictability.

Industry analysts such as Gartner, Forrester and others regularly publish tools and papers which compare the Total Cost of Ownership (TCO) or similar metrics for technologies like email and CRM, between the traditional onsite deployment and hosted models.   For most organisations except those with very specific or unusual needs, the conclusions of these analyses regularly come down on the side of hosted services in terms of absolute cost, value for money and quality of outcome.

These models are proprietary and, regrettably, mainly US-centric.  There is not a lot of independent empirical evidence available from Australian users.  We can however give you two customer case studies.

For two typical Emantra customers of approximately 100 and 1,000 users, the unit "TCO" of a single Microsoft Exchange 2010 mailbox was carefully calculated to be approx $46 and $36 per month, respectively. This included a five-year amortisation of the enterprise licence cost and server and installation capex, and used a default interest charge of 8%.  If this number is surprisingly high to you, consider that it includes all elements of the ongoing service including the cost of hardware maintenance contracts, software assurance, technical labour of a reasonably high standard, training, replacement and recruitment, insurance, data room costs including power, environmentals and bandwidth, a remote site backup regime and an allowance for 24/7 support.

This estimate can be compared directly against the cost of Emantra's multi-tenant Hosted Exchange which is $15.95 per month (ex GST). For the larger organisation, this delivered savings in the order of 55%, $30 per mailbox per month, or $1.8 million over five years.  For the smaller organisation, the percentage saving was even greater at 65%.  These conclusions are not significantly different to the published analyses referred to above.

But don't take our word for it.  We encourage you to do your own TCO comparison and can help in this process with standard templates if required.