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Why is private cloud hosting usually more cost effective?

private cloud hosting

There are a variety of factors that make private cloud SharePoint and Exchange hosting more cost effective than on-site hosting.

1. Lower initial costs: The hardware, software, physical facility, IT staff, and supporting infrastructure needed for on-premises hosting can be very costly. Suitable single server configurations range in price from $1,500 to $5,000 or more, with organizations supporting a large number of users requiring clusters of multiple servers and more extensive storage systems.

2. Lower operating costs: Once you own the servers and software, and have your Exchange and SharePoint systems up and working, there are still more costs. The average server consumes more than $700 of electricity each year. On- site servers must also be managed, updated, and maintained. The median compensation for a Sr. System Administrator is $99,520 per year.

These expenses make on-site hosting a much more costly option compared with private cloud. For example, after switching from on-premises hosting to a private cloud solution, Serena Software cut its annual Exchange hosting costs from $1 million to $250,000. Lower Initial costs Lower Operating Costs Less Downtime Increased efficiency Reduces or eliminates upgrade costs.

3. Less downtime: Downtime can be expensive. For businesses that rely on Exchange email and SharePoint collaboration, this can be especially true. If the system goes down, customer communication and employee productivity suffers. Leading private cloud providers guarantee 99.999% uptime or better, so reliability is never an issue.

4. Increased efficiency: Another important consideration when deciding between on-premises and private cloud SharePoint and Exchange hosting is the effect it will have on your company’s efficiency. Although this can be difficult to quantify, there are several ways private cloud will likely make your employees more productive.

With a private cloud implementation, IT team members will be able to focus more on your company’s core competencies and strategic initiatives, and allocate less time and resources to infrastructure problems. And because private cloud hosting is usually more reliable and available than on-site hosting, staff can communicate and collaborate without interruption.

5. Reduces or eliminates upgrade costs: Although some companies might find that the monthly expense for on-site hosting is lower than a comparable private cloud solution, these figures usually do not take into account the need to upgrade and replace equipment as it fails or becomes obsolete.

With private cloud solutions, these costs are included in the monthly fee and clients are protected from unexpected expenses due to premature hardware failures.

The bottom line on private cloud financial advantages is one of the most compelling arguments in favor of private cloud for SharePoint and Exchange implementations. In almost every scenario, private cloud will beat on-premises deployments, both for initial and long-term operating costs.

Source: Dell. ZDNet.


One comment on “Why is private cloud hosting usually more cost effective?

  1. StellarPhoenixS
    July 31, 2014

    Reblogged this on Stellar Phoenix Solutions.

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