CLOUD TO CO-LOCATION MIGRATION
A COST VERSUS BENEFIT CASE STUDY
SAVINGS OF $372,080 PER ANNUM
Our new client's CFO asked inSync to analyze their information technology infrastructure & expense. Their apps & data were being hosted by a 3rd party Cloud provider in Las Vegas. They were having many problems with their environment including slowness, connectivity problems, & servers going down. Their Cloud hosting expense was $32,000 per month.
Our client had 2 full time employees for desktop support. They were also paying their 3rd party provider $12,000 per month for desktop support. Their contract was a bit obtuse because their 3rd party provider was allowed to deem anything out of scope. A third monthly invoice was given for the Time & Material support that was out of scope - the billable rates varied from $170-$200 per hour, and averaged $3,500 per month.
There are 2 major flaws in the Cloud hosting model:
The 1st flaw is that your Cloud provider will not provide the hardware specifications of the servers that are hosting your applications & data. In this case, we suspected our client's applications & data was being hosted on old hardware because of the lagging speed & the number of times their Citrix servers were crashing.
In another example, we found our client was paying $8,000 per month to their hosting provider &, during our due diligence, found their applications were hosted on 8 year old servers. We migrated their applications to an on premise solution, eliminating the $8k expense per month.
The 2nd flaw is cost. As your data increases, so does your monthly bill. For this client, the costs went from $12,000 to $32,000/month in just 3 years.
HOW WE HELPED OUR CLIENT
This particular client is a manufacturer & had three different locations. So rather than an on premise solution, our solution was to purchase a state of the art 3 server cluster solution which is hosted at Databank, a best in class co-location facility located in Irvine. This solution provided the redundancy, a secure hosting platform & 24/7/365 uptime...And with state of the art equipment, it was a much faster solution. Their monthly expense went from $32,000/month to $1,450/month.
The hardware & software cluster solution, including the co-location build out investment was $282,817. That number includes the labor for the colo build out, data migration, testing & debugging.
CLOUD HOSTING SAVINGS
First Year's Savings Eliminating Cloud Hosting Fees
Annual Hosting Fees $389,480
Hardware & Software Investment $282,817
Annual Co-lo fees $17,400
Year 1 Savings $89,263
Years 2-5 Annual Savings $372,080/year
Total Savings Over 5 Years = $1,577,583
The overall savings is understated. We used today's numbers but, with the Cloud, those hosting fees increase monthly as your data increases.
IT SUPPORT & SERVICES SAVINGS
As stated above, our client was paying for $12,000/month for desktop support, & approximately $3,500/month for Time & Materials support. We took over all of their responsibilities, server & desktop support, for $15,000/month, a savings of $500/month. The client's internal staff of two was laid off resulting in more savings. Our co-location & cluster solution, & a simplified network infrastructure, resolved many of their connectivity & printing issues. Their monthly tickets went from 400 to 150 tickets/month.
WHAT WE ACCOMPLISHED
Performed a deep dive audit documenting their 44 virtual servers in Cloud facilities;
Created a detailed project plan including the hardware & software investment required for the three server cluster solution & the co-lo build out;
Created a migration plan, including testing & debugging, to migrate their virtual servers to the cluster solution;
For a disaster recovery/business continuity solution, we are replicating their servers to a Cloud-based solution for $4,000/year;
Their 3 physical clustered servers are being monitored 24/7 with a cloud-based system for $60/month;
The 44 virtual machines are being monitored with a Linux based system that cost $1,000 - a one time fee - to configure the solution.
We simplified & documented our client's network.
Their users are much happier with a faster, more secure network with less problems;
Our client has total control over their hardware, software, applications & data;
Their network is current & well-documented;
Their data is replicated on the cluster solution, backed up onsite & in the Cloud.
They have a disaster recovery/business continuity solution in AWS.
And they are saving hundreds of thousands of dollars per year on Information Technology.
OUR CLIENTS ARE EXTREMELY HAPPY WITH THE RESULTS OF OUR ENGAGEMENT.