Cost comparative of On premise vs Cloud infrastructure
Summary
The purpose of this exercise is to cover the expenses that the average company incurs when hosting their ERP, CRM and Bi databases on their own servers (on-premise infrastructure) vs a Cloud one.
1$ = Rs 40.
Need a Cloud ERP?
On premise infrastructure
Server Hardware (Dell T640)
Server Hardware installation
Server Software + 5 users (SQL Server)
Server room (Secured floor space)
Server room air conditioning inc. Install
Server room Security system
Security software (Mc Affee)
IT Team of 3
PC’s, furniture, Enrollment fees, Training.
Electricity bill
Insurance on Hardware and Employees
Total Database Costs
OP initial investment
Rs. 130 000
Rs. 150 000
Rs. 500 000
Rs. 5 000
Rs. 100 000
Rs. 50 000
Rs 0.00
Rs 0.00
Rs 500 000.00
Rs 0.00
Rs 0.00
Rs 1 455 000.00
OP monthly costs
Rs 0.00
Rs 0.00
Rs 0.00
Rs 0.00
Rs 0.00
Rs 0.00
Rs 5 000.00
Rs 175 000.00
Rs 0.00
Rs 50 000.00
Rs 20 000.00
Rs 230 000.00
OP 5 YEARS TOTAL COST
Rs 130 000.00
Rs 150 000.00
Rs 500 000.00
Rs 5 000.00
Rs 100 000.00
Rs 50 000.00
Rs 300 000.00
Rs 10 500 000.00
Rs 500 000.00
Rs 3 000 000.00
Rs 1 200 000.00
Rs 16 435 000.00
True Cloud
Included
Included
Included
Included
Included
Included
Included
Included
Included
Included
Included
Rs 0.00
Notes
It is important to note that our costing has excluded VAT and freight fees on all hardware and services.
Additionnally, server upgrades, maintenance and update fees have been kept to a minimum and should be considered.
The investments are on 5 years and it is common practice for companies to change their servers after this period.
Employees can leave your company and re-enrollment fees as well as training could be higher based on this too.
Benefits of On-premise infrastructure
1) On-Premise offers companies the sole benefit of owning their data.
2) You can access your data even without internet connection.
3) Upgrades are optional.
4) In some cases, you get keep what you have even if you stop paying your licence fees.
Need an on-premise ERP?
Benefits of true cloud infrastructure
1) Access to your environment is done in under 5 days of contract signature.
2) Your CRM and ERP are pre-installed and only require configuration and implementation.
3) Your secured database can be safely accessed from anywhere in the world.
4) Upgrades are automatic, free and do not affect your customisations/ developments.
5) Users are given test environments 3 months prior to upgrade to test and call out any issues.
6) Payments are done on a yearly basis, avoiding bank fees.
7) Cheaper way to get the business to scale without need for further IT investments.
8) Safer to run, since the vendor provides up-to-date database security and perform real-time monitoring.
Need help decide?
Conclusion
Cloud computing is the most appropriate model for businesses that do not wish to invest into servers and maintenance teams.
Typical cloud ERP customers need their employees to be opertional within weeks instead of months.
On-premise technology requires more resources, which often do not last more than 5 years before needing replacement.
However connectivity status in your area will determine the feasability of a system over the other.
Cloud computing works perfectly well but requires a stable internet connection.
On-premise however can be accessed via intranet, without necessarily having access to internet.