The Cost of the Cloud (or not)

Published Date 6/16/12 12:48 PM

Moving to the could, whether a startup looking to lower initial capital expenditure or an established company lowering Total Cost of Ownership (TCO), provides a cost structure that can't be overlooked. It allows innovation and creativity in a business plan or a product to reach the market without requiring a huge up-front capital outlay. Good news for the next crop of entrepreneurs!

	OLD WAY OF		YEAR ONE	NEW WAY OF	YEAR ONE
	DOING THINGS		COST	DOING THINGS	COST
SERVERS	BUY 15 MACHINES AT $7,000 TO $10,000 APIECE	$70,000		SIGN UP FOR AMAZON WEB SERVICES	$250 A MONTH AT FIRST, ON A VISA CARD. GROWS TO $2,500/MONTH
PEOPLE TO RUN SERVERS	HIRE 5 IT SPECIALISTS AT $60,000 APIECE	$300,000		LET AWS DO IT	$0
ENTERPRISE E-MAIL	BUY A MICROSOFT EXCHANGE LICENSE	$25,000		USE GOOGLE	FREE AT FIRST. $25/MONTH/USER IF YOU GET BIG.
OFFICE SOFTWARE LICENSE	BUY A MICROSOFT OFFICE LICENSE	$25,000		USE GOOGLE DOCS	FREE AT FIRST. $25/MONTH/USER IF YOU GET BIG.
DATABASE SOFTWARE	BUY AN ORACLE LICENSE	$25,000		RENT BY THE HOUR FROM AWS	BUILT INTO AWS CHARGES. ABOUT $1/HOUR WHEN YOU USE IT
PHONE/WEB INFRASTRUCTURE	BUY FROM TELCO OR CABLE COMPANIES	$2000 TO $3000/MONTH		GET CONNECTED VIA THE CLOUD	$5,000/YEAR
FILE SHARING	BUY AN OPENPAGES LICENSE	$100,000		USE A FREEMIUM SERVICE SUCH AS BOX.NET	FREE AT FIRST, $15/MONTH/USER IF YOU GET BIG.
TESTING SOFTWARE	BUY A MERCURY INTERACTIVE LICENSE	$100,000		USE HADOOP OPEN SOURCE	FREE
TOTAL	$600,000, MINIMUM				$50,000, TOPS