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 |
Source: "Thrifty Does It", Forbes, 5/2012
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