Server Cost

Take a close look at the servers that are sitting in a closed room at the end of the corridor of your office. They probably have given you a lot of good service over the past few years. Think about all the data that you have processed and stored there, not to mention the applications that run on it every day. Have you ever wondered how much time and money you spent on keeping these machines working? You may be surprised at the numbers if you did. These days they talk a lot about cloud server solutions, and you may be tempted to make the leap. But before you make any decision, you should have a clear idea of ​​what you are spending now and how it relates to the price of cloud solutions. What is the real cost of owning a server?

Free template: Comparison of total cost of ownership of cloud servers
The first thing you need to do is to go beyond the initial cost of your own solution compared to the monthly cost of the cloud. The real picture of what is cheaper goes far beyond the cost of a new own server or a yearly subscription to cloud servers or infrastructure as a service. Look at recurring expenses instead. How much do you really pay for the operation, maintenance and updating of a local solution during its service life (usually a five-year period)? What other costs are associated with the cloud solution? Only then can you make the right decision. Need to know the total cost of your infrastructure right away? Download our total cost of ownership tool.

How to calculate total cost of ownership of servers
The best way to calculate the cost of ownership is to consider all of your expenses: direct, indirect, or hidden. Here is a breakdown in case you are wondering what we are talking about. Direct costs are associated with any equipment needed for a local solution. This can vary from your real servers to the server room where you store them. It also includes electricity and ventilation (heating, ventilation and air conditioning). On the other hand, indirect costs are related to the salary that you pay to your system administrator and any other IT professional who services your hardware or fixes software errors. And hidden costs? Loss of productivity due to downtime is a good example.



How much does it cost to go to the cloud?
No matter what costs you want to analyze, our cost calculator tool can help. It evaluates all the factors involved in making your own decision, and compares it with the total cost of the cloud.


The tool calculated that the average cost of this local configuration

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How many virtual CPUs, RAM, and disk space do you need to perform your operations? Using our cost calculator tool, we introduced the approximate amount of resources that most small and medium enterprises will use each month (2 virtual CPUs, 8 GB of RAM, 512 GB of disk space). Then we played with uptime targets to reflect the typical SMB situation. We looked at accessibility and what it meant for hours of downtime every month. The numbers are changing. Some providers offer 98.0% availability, which is about 14.4 hours of allowed downtime per month. A decent local solution is also about the same previous percentage, therefore, comparing it with the transition to the cloud, you can start with this data as a guaranteed uptime. On the other hand, other providers offer their customers a service level agreement for 99.9% availability. This means only about 44 minutes of downtime per month. After all, downtime is the hidden costs for your business. When your site is down, your data is not available. In 2017, every hour of downtime costs organizations an average of $ 100,000. In May of the same year, the power supply system in the British Airway data center failed. The result was a loss of about $ 68 million in refunds, after which share prices fell by 2.8%. The higher the percentage of availability, the higher the uptime of your website and, ultimately, the better it is for your business.

In our scenario and with the help of our tool, we took into account the recommended frequency of equipment updates for a local server (usually 3-5 years). As part of comparing prices for cloud servers, we set the update frequency to 48 months. Most internal servers will begin to lose the ability to adapt to growing loads after four years. However, with a cloud server, you can increase or decrease your resources according to your needs. Finally, we have introduced another important indirect cost: the average annual salary of a system administrator or a technical employee. For this example, we used an average of 61,000 dollars. This number has been rounded off by Payscale.com.

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