Cloud Versus a Traditional Network: A Comparison of Costs

As we said earlier, each client has a unique set of circumstances and needs that will factor into the cost savings and benefits. To give you an idea of what you can save when moving your network to the cloud, we’ve put together a sample business scenario we commonly find, and the savings obtained with cloud computing. 

Please note we’ve shown this over a three-year period which is on average the normal span of time before workstations and servers need to be improved and software upgraded. Moving to the cloud enables the ability to avoid the purchase of new hardware and software (which is a huge cost savings); hence showing a three-year period to reflect accurate cost savings. Another reason for the three-year period is that cloud services costs decline over time which would risk the comparison going out-of-date and reducing the savings.

Cloud Versus a Traditional Network 

CONTENSCO Consulting This is a professional services firm that has 25 employees all using Microsoft Office. Other applications being used include QuickBooks, Microsoft Exchange, SharePoint and BOM add-on for QuickBooks.

Item 

Traditional Network Cost Over 3 Years 

Cloud Network Cost Over 3 Years 

Hardware 

Server 1 – Management Server (DNS, DHCP, AD) 

$ 7,000 

$ 5,000 

Server 2 – Exchange 

$ 12,000 

$ 4,500 

Server 3 – QuickBooks 

$ 10,000 

$ 7,500 

Server 4 – Remote Access and File Server 

$ 7,000 

$ 8,000 

Workstations (25) 

$ 25,000 

$ 25,000 

Hardware Subtotal 

$ 61,000 

$ 50,000 

Software 

Microsoft Server Operating System 

$ 7,968 

$0 (Included with Server) 

Microsoft Office Licenses 

$ 20,000 

$ 11,200 

Exchange Server 

$ 5,800 

$0 

Exchange User Licenses 

$ 1,324 

$0 

SharePoint 

$ 11,148 

$0 

SharePoint CALS 

$ 549 

$0 

Antivirus 

$ 5,000 

$ 5,000 

Spam Filtering 

$ 6,300 

$ 1,800 

Software Subtotal 

$ 58,089 

$ 18,000 

Hardware and Software 

$ 119,089 

$ 68,000 

Other Costs 

Internet Connection 

$ 7,200 

$10,800 

Firewall 

$ 8,000 

$ 8,000 

Backup (on-site and off-site) 

$ 12,000 

$ 8,000 

Labor 

Outsourced IT Support for Maintenance 

$45,000 

Internal IT Support Costs 

$120,000 

Total Costs 

$239,089 

$113,00 

Savings: 

$126,089 

Our experience is that, on average, most companies are spending too much in the traditional model and suffering from adapting to fit their business through all the ‘hidden’ compromises. The cost savings are often compelling enough for business owners to overlook the risks of cloud computing. If carefully planned, those risks of downtime and security are greatly minimized. In fact, our average client saves between $ 1,500 to $ 3,500 when they move to our cloud and experience LESS downtime, problems and system crashes than they did with their in-house network. 

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