TCO

Purchasing a software supporting business processes usually there is a need for reliable server.

Prior to the acquisition of the server you should consider a variety of options - whether to invest on your own server or to use the server service? It is helpful to determine the server total cost of ownership (TCO) and payback on investment (ROI) and compare the prices of the virtual server service.

Server is more expensive than the service - TCO (Total Cost of Ownership)

The server does not automatically mean only the physical server purchase but also the creation and managing of the infrastructure needed for the server - management and renewal of components. According to IDC (International Data Corporation), during the first three years of use the server itself only costs 25% data, remaining 75% are costs for the infrastructure. Purchasing a server needs large one-time investments, later increase the costs on spare parts and software updates.  The physical servers require a separate room or place which also means permanent costs.

Necessary infrastructure for server operation:

  • Ensuring electrical power systems (UPS)
  • Cooling air conditioners
  • Switches (duplicated for reliability)
  • Firewalls (duplicated for reliability)
  • Cables
  • Hardware upgrades
  • Configuring the server
  • The construction and operation of the server room
  • Electricity (the server itself, network appliances, air conditioners)
  • External IP address and an internet connection (recommended to duplicate for better performance)

Depending on the necessary reliability, both the initial investment and maintenance costs than can be very high. In addition, considering that the bigger part of the “company owned servers” work in most cases less than 10 % capacity, it is worth to consider as a possible alternative the virtual server lease.

vINFRA service vs. a physical server

Potential use of vINFRA service and equal physical server are similar. But vINFRA service will take advantage of the server and infrastructure purchasing costs. Also, there is no need to invest in hardware update and administration. Extra expense for “company owned server” is outsourcing the new physical server setup. There is no such a cost for vInfra customers.  “Company owned server” also has an extra cost of expensive high speed internet connection which is included in the price of vInfra.

Investment in the acquisition of business class physical servers compared to the approximate volume of vInfra service:

  Physical infrastructure vInfra
Server 3000 € Included in price 
UPS 500 € Included in price 
Air conditioner 1000 € Included in price 
Duplicated power supply Depending on agreement Included in price 
Generator for power back-up Too expensive for one server Included in price 
Duplicated switches 500 € Included in price 
Duplicated firewalls 1300 €  Included in price 
Security equipment 700 € Included in price 
Safety against fire (gas extinguisher) Too expensive for one server Included in price 
Cost of construction 1500 € Included in price 
TOTAL   8600 € 0 €

Compared to the monthly cost of the physical server the server service is more or less the same, varying according to the selected vInfra machine:

400W power server Physical server   vInfra
Power 25 € -
External IP 11 € -

Internet 8/1 Mbit/s SDSL/
50/50 Mbit/s

83 € -
Monthly fee for server - from 64 €
TOTAL 119 €  from 64 € 

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