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TCO for a cloud


How to compare TCO for cloud and for dedicated solution

How to compare TCO for cloud and for dedicated solution

Published in Business , Technology
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  • 1. Milan Petrásek
  • 2. Definitions CAPEX – Capital Expenditures OPEX – Operation Expenditures PUE – Power Usage EffectivenessPUE is proportion of total power consumption of datacenter (i.e. including air conditioning/cooling, lightning, consumption of UPS … to the power consumption of IT equipments)Commonly is between 1,8-2,5 (the best „green“ datacenters in the present have about 1,15-1,2 for tens of thousands of servers)I.e. total power consumption = IT power consumption × PUE
  • 3. Compare the comparableIt can not compare one timepurchase with monthly fee ofservice Why? Initial cost of hardware (HW) is only minority of TCO. For correct comparison is necessary to include all of cost (also non-cash) for the entire period of operation.
  • 4. What is necessary to calculate to TCO? CAPEX • Server cost • Storage cost • Infrastructure cost • LAN (switches, …) • WAN (firewall, loadbalancer …) • UPS • Diesel generator • Racks • Cabling • Air conditioning (cooling) • Server room (space - m2, raised floor, fire alarm, security system, fire equipment …) OPEX • Electrical energy (see PUE) • Human resources (see next slide) • Contracts about support for all of equipments (servers, LAN, cooling …) • Leasing of space
  • 5. What is necessary to calculate to TCO?Separate part is human resources Plain IT employer isnt available more than 10,5 month of year, rather less - 4-5 weeks vacation, trainings, conferences, internal training, sick days, illness) Substitution for absence Holidays Working hours is 8,5h All of this is included in service from cloud provider with guarantee of availability with penalty (Service Level Agreement SLA). 24×7×365
  • 6. What is necessary to calculate to TCO?And others … for thought• How much cost failure of HW?• Price of money (inflation, exchange rates)• Regularly check (revision) of electric cablingDiesel generator is separate part, if it is needed• Space for diesel generator (building, external container) – it is necessary to solve noise, vibration …• Electrical substation• Fuel – filling, circulation …• Emission• Maintenance
  • 7. Why choose a cloud? OPEX vs. CAPEX  Easier planning expenditures  Decreasing CAPEX in times of economic uncertainty (crisis) The risk of investing in technology  Protection against investing in technologies that may become obsolete or unnecessary for me  Independence on HW suppliers  Flexibility  Pay as you growth
  • 8. Cost allocation for example
  • 9. Questions