Cloud SaaS

Quick & dirty on premise Vs. cloud

ROIA while ago I attended a networking event. During one conversation I was asked to produce a back of an envelope cost benefit for a client server Vs. cloud.

One person suggested I add to this to my blog. At the time I thought a good idea but inevitably I didn’t do so.

A couple of days ago attending a different event I bumped in to two people I did the back of the envelope calculation for and was asked why I hadn’t posted the example. As requested below is a quick and dirty calculation.

Let’s consider the costs for a 30 user system


– £5,000 server cost
(Low end server + SBS software + software licence)
– £3,000 installation cost

So at £5,000 , + 12 hours a month of management of server (or £399 under a 30 user MSP agreement for SBS). No off site backups for 30 users. (So either £399 or £455 maintenance cost – using a low £35 and hour rate).

I’ll use the £399 in my example, and Office 365 – £4 per user x 30 = £120 per month cost.

1 year ROI for 30 users:
– Office 365 £120 per month
– SBS on site £1,065 per month ((server cost + installation cost) + (hours x hourly rate)) / months

2 year ROI for 30 users
– Office 365 £120 per month
– SBS on site £732 per month ((server cost + installation cost) + (hours x hourly rate) x years))) / months

3 year ROI for 30 users
– Office 365 £120 per month
– SBS on site £621 per month ((server cost + installation cost) + (hours x hourly rate) x years))) / months

If you have a fully loaded SBS server, my experience is that the server maintenance is greater than 12 hours per month (more like 20 hrs. £750 per month @ £35 per hour)

3 year ROI for 70 users – Office 365 £700 per month
– SBS on site £972 per month (which is low), more like £1,200 per month

The above equation suggests cloud computing is cheaper option than on premise client server model. I reiterate this is a quick and dirty calculation. There are other factors which should be considered on a case by case basis.

Advertisements