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.

Microsoft  |  Citrix  |  VMware  |   Cloud

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