It is often thought that the cost of a server is given only by the purchase cost, instead, the user must know the actual costs, even the hidden ones.
The process is similar to that of a car: knowing the purchase price is not enough. Management costs such as fuel, electricity, insurance, repairs, depreciation, etc. must also be taken into account.
Total Cost of Ownership
These hidden costs, not contemplated on an invoice in the accounting, arise with the company's local servers. Users need to know these amounts to get an overview of the total costs, also known as the 'Total Cost of Ownership' (TCO). The following checklist provides the essential cost factors.
Only when users have an overview of the actual costs of IT infrastructure can use make an accurate comparison with the expenses for a cloud solution. The easiest way to do this is with a model-based calculation and data. This will give the user a clear and complete picture.
Details of the costs of a proprietary server
- Costs for hardware, including peripherals (hard drives, monitors, backup media, etc.)
- Software licenses for the operating system and applications
- Recurring license fees (software subscription)
- Backup costs
- Depreciation
- Costs for the external IT service provider (maintenance contract, support calls, on-site assignments, etc.)
- The percentage of time that individual employees spend on IT tasks such as software updates, user administration, or communication with the external IT service provider. These costs are derived from the gross salary.
- Hours of work lost per year due to a server failure (time during which employees cannot work).
- Costs incurred for recovery in the event of data loss, for example, due to a hardware defect or a virus attack.
Example of calculation over 5 years for 2 physical servers in redundancy, 4 Virtual machines for a total of 4 TB, and 20 Users
- Hardware € 18,000.00
- Basic Software € 13,000.00
- Electricity € 4,500.00
- Conditioning € 1,500.00
- Local Backup € 1,938.00
- Cloud backup € 16,000.00
- IT labor and personnel cost € 11,500.00
- Total in 5 years € 66,438.00
- The annual cost is € 13,287.00
- Comparison between the costs of a local server and the managed Cloud service of Ng Way.
- Example of cost for the same configuration in the Cloud Ng Way including management, monitoring, updates, security, licenses, local backup, and disaster recovery backup in 3 remote data centers.
- The annual fee is € 8,700
- Annual savings € 4,587.00
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