2008: The Year that Microsoft Embraced the Cloud:
“Also problematic is the fact that parts of Microsoft still seem stuck in the past. The recently released Windows Small Business Server 2008 is an excellent revision to the popular SBS line, for example, but requires businesses to install and manage expensive and complex software locally. Meanwhile, many small businesses, educational institutions, and other businesses are seeking instead to offload such capabilities to the cloud, using services that are much less expensive and complex, and are managed by others.”
I always hear that but let’s do the math shall we?
20 users, of Microsoft hosted exchange and sharepoint. No onsite domain controller, just Exchange and Sharepoint.
Per month total of $345
Now let’s throw in $1,000 bucks for a onsite NAS or server or something to share files locally, okay?
Grand total for 5 years is $20,700. Plus the local storage is $21,700. Time value of money discount factored at 5% (okay so that may be on the high side but I’m using the same rate for both computations so let’s go with it), amounts to $19,277.64.
Using the Dell SMB solution wizard…which I may say is pretty cool… http://www.dell.com/content/topics/global.aspx/sitelets/solutions/software/business/en/us/server_solutions?c=us&cs=04&l=en&s=bsd
And using it’s wizard I put in that I will have 20 users/medium email use, will use Sharepoint.. now to be fair I did not put Premium for a side SQL but Sharepoint will work just fine on the standard box
(but the cal part is a bit confusing as you have to remind yourself that there is 5 users built into the server)
The price for the hardware is
So let’s throw in $5,000 the first year for the initial install and say $2,000 per year maintenance after that just for the server because even that hosted model up above doesn’t take into account that workstation maintenance costs that need to get to that cloud and thus may need servicing as well.
After the time value of money impact is calculated total price tag is $19,976.94. $700 is not “much” less in my book when I own the server outright from year 1.
The bottom line is just like in any statistical study you cite. Depending on what you want to prove you can make numbers say anything. As a beancounter I don’t buy this argument that cloud services are ‘by design’ much less expensive when doing the math depending on your needs and the number of users. I’m seeing that in some cases it’s the same price tag or not that significantly different. Furthermore, I ASSumed that that $345 price tag will remain constant for the next five years. Subscriptions normally don’t in my experience.
Oh the cloud vendors will say that I’m a dinosaur and all that, but just do the math folks and make the best decision for your NEEDS. I don’t see that cloud services are MUCH less in price tag. This is similar to the lease versus buy calculations. Push the pencil and do the math. It may not be cheaper depending on the numbers. Go with the solution that makes the best sense for the firm, but don’t push the argument that it costs less before doing the math.
It may not cost that much less in fact.
And for the record, I still have to manage that hosted stuff with user addition and deletions. It still doesn’t magically run itself.