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Cloud Computing Shifts the TCO Discussion
The cloud computing model can help companies conserve cash and focus limited resources on the business, instead of reacting to IT infrastructure-related fire drills. In the cloud computing model, vendors provide Web-based access to applications as a service, through a subscription pricing model. This eliminates the need for customers to buy, deploy and manage IT infrastructure and solutions. Vendors take responsibility for everything: the servers, storage, operating system, database, business software, updates, migration, power and cooling, data center space, and support services. As a result, cloud computing shifts the IT burden from the customer to the cloud computing application vendor.
Cloud computing vendors can provide these benefits because they’ve built their solutions as Web-based services from the ground up. Instead of building their solutions to run in-house, as a separate, individual instances for each customer, they architect their solutions for a one-to-many, or multi-tenant model. This means that they can run thousands of customers on a single instance of the database and application software. By optimising their business solutions for this shared environment, they can achieve efficiencies throughout the solution lifecycle that would be difficult for on-premise vendors to achieve.
Lean and mean IT
Headquartered in Slovakia, the U.S. division of this security software firm has grown from 1 to 135 employees over the past 10 years. The division had began by using multiple brands of packaged software for accounting, contact management and reporting functions. But as it grew, the organisation wanted tighter integration across functions, better reporting, and an easier way to provide access to an increasing number of remote employees. It also wanted to keep upfront capital and ongoing support costs low. “The fact that there was little or no infrastructure or internal support required drove us to a software-as-service solution,” according the firm’s Business Systems Director. Since deploying NetSuite in 2006, the company has kept IT “lean and mean”, and “the single system, real-time view of customers helps our sales and support teams to offer better service to customers”.
Why does TCO matter?
In the IT industry, Total Cost of Ownership (TCO) is used to calculate the total cost of purchasing (or in the case of cloud computing, subscribing to), and of operating a technology solution over its useful life. TCO provides a realistic and holistic measure of the long-term costs required to acquire and operate technology solutions. Return on investment (ROI) is another method to evaluate and prioritise technology investments in a company. This measure is typically used to compare investments that uncover new top line revenue and growth opportunities. However, ROI tends to be more subjective in nature than TCO, because ROI looks at business benefits, which often cannot be measured as objectively as costs.
Hurwitz & Associates views TCO as a preferred method to compare technology investments when two solutions provide roughly equivalent benefits over the solution lifecycle, but have different types of costs associated with acquisition, maintenance and operation. For these reasons, a TCO comparison offers a more tangible assessment of the total costs involved in deploying cloud-based SaaS and on-premise business solutions.
Cloud Computing Shifts the TCO Discussion
The cloud computing model can help companies conserve cash and focus limited resources on the business, instead of reacting to IT infrastructure-related fire drills. In the cloud computing model, vendors provide Web-based access to applications as a service, through a subscription pricing model. This eliminates the need for customers to buy, deploy and manage IT infrastructure and solutions. Vendors take responsibility for everything: the servers, storage, operating system, database, business software, updates, migration, power and cooling, data center space, and support services. As a result, cloud computing shifts the IT burden from the customer to the cloud computing application vendor.
Cloud computing vendors can provide these benefits because they’ve built their solutions as Web-based services from the ground up. Instead of building their solutions to run in-house, as a separate, individual instances for each customer, they architect their solutions for a one-to-many, or multi-tenant model. This means that they can run thousands of customers on a single instance of the database and application software. By optimising their business solutions for this shared environment, they can achieve efficiencies throughout the solution lifecycle that would be difficult for on-premise vendors to achieve.
Lean and mean IT
Headquartered in Slovakia, the U.S. division of this security software firm has grown from 1 to 135 employees over the past 10 years. The division had began by using multiple brands of packaged software for accounting, contact management and reporting functions. But as it grew, the organisation wanted tighter integration across functions, better reporting, and an easier way to provide access to an increasing number of remote employees. It also wanted to keep upfront capital and ongoing support costs low. “The fact that there was little or no infrastructure or internal support required drove us to a software-as-service solution,” according the firm’s Business Systems Director. Since deploying NetSuite in 2006, the company has kept IT “lean and mean”, and “the single system, real-time view of customers helps our sales and support teams to offer better service to customers”.
Why does TCO matter?
In the IT industry, Total Cost of Ownership (TCO) is used to calculate the total cost of purchasing (or in the case of cloud computing, subscribing to), and of operating a technology solution over its useful life. TCO provides a realistic and holistic measure of the long-term costs required to acquire and operate technology solutions. Return on investment (ROI) is another method to evaluate and prioritise technology investments in a company. This measure is typically used to compare investments that uncover new top line revenue and growth opportunities. However, ROI tends to be more subjective in nature than TCO, because ROI looks at business benefits, which often cannot be measured as objectively as costs.
Hurwitz & Associates views TCO as a preferred method to compare technology investments when two solutions provide roughly equivalent benefits over the solution lifecycle, but have different types of costs associated with acquisition, maintenance and operation. For these reasons, a TCO comparison offers a more tangible assessment of the total costs involved in deploying cloud-based SaaS and on-premise business solutions.
Are We Becoming A Society Glued To Our Cell Phones?
In todays world of telephone technology and endless possibilities, internet cell phones are becoming increasingly popular in everyday society. More and more people are becoming accustomed to living with their cell phones tightly fastened to their hips, only inches away from a dial and a click. Children as young as nine can be seen on playgrounds or school halls using their BalckBerrys or Motorola telephones. Text messaging has even become a new way of talking in American homes.
Gone are the days when old-fashion, wired, wall telephones were a part of our everyday lives. No more slow dialing or rotary calling. The old-fashioned telephone has been replaced with PDAs, BlackBerrys, Motorola phones and even iPhones. Cell phone emails and instant text messaging are becoming all too common. The inevitable expansion of telephony technology has become a hot commodity in the business world. With its vast improvements in telephone conferencing, businesses are now opting for virtual technology to conduct their meetings. Using Polycom or Konftel conference room phones is their first choice. Face to face meetings have been replaced with web cams, Polycom phones and Cisco telephones.
Top telephony vendors, such as, Grandstream, Polycom or even Cisco have all come out with their latest VOIP phones, each promising clear communication and noise cancellation. These telephony giants have all made their mark in technological advances in the telecommunications world. The seamless integration of the telephone systems and networks is but one example of how Cisco, Grandstream, Polycom and even Dialogic have all made vast improvements in this world.
Whether its your iPhone, wireless cell phone or Apple Touchscreen, the latest fads in telephony technology have only shown that cell phone usage has become as innate and second nature to us as breathing air. Cell phones have become as popular as high definition televisions, computer laptops and even MP3 players. Which is why, its no surprise that cell phones now come in various packages and deals.
You can email a parent or even text message a friend. You can browse the internet or even pay a bill online – all from the touchscreen of your cell phone. Telecommunication cell phone carriers, such as, Verizon, Sprint and AT&T are all scrambling to offer consumers great deals.
Purchases of BlackBerrys, Motorola phones or even Apple iPhones are not restricted by age or by wage. Someone who makes a modest income can easily afford the modern conveniences of a cell phone. Telephony carriers are offering their bundle packages on text messaging as a means of family gatherings. Children from an early age are being taught to text message their parents in cases of emergencies. Teenagers are waiting in anticipation for the latest telephony fads, especially when it comes to ipods, iPads, Touchscreens, iApps and iPhones.
Whatever the reason, its obvious that we as a society are becoming more dependent on our cell phones. They have become a part of our every day lives. We have become a society incapable of living in a text free world.