CLOUD TO CO-LOCATION MIGRATION

A COST VERSUS BENEFIT CASE STUDY

 
SAVINGS OF $372,080 PER ANNUM

The Problem:

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.

 

Sidebar:

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.

THE RESULTS

  • 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.

FOR MORE INFORMATION ABOUT OUR SERVICES,

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