Project 1 UMGC CCA 610

Economic Analysis

The total cost of ownership estimates provided below are from Microsoft's Azure platform.

BallotOnline needs a means of optimizing its IT budget while decreasing the budget by one

percent year to year. The five year analysis included certain assumptions based on the industry

averages developed over years of data collection.

The analysis showed that TCO costs for the current workload on a five year trajectory was

$39,570,516.00 while the same resources would costs $7,687,211.00 hosted on Azure’s secure

public cloud. That’s a cost savings of over 32 million dollars. The largest costs savings were in

networking (4.3 million), electricity (3.5 million) and hardware costs (22 million) . These

savings are in large part the result of offloading these responsibilities to the Azure global

infrastructure.

The monthly electrical cost of running 800 servers on onsite exceeded $58,000.00 alone

while running the same workload on VMs in the public cloud ran a total cost of 44,000.00. This

means the electrical costs alone justify the move to a public cloud. The other areas of savings

were in networking where the costs of on prem service provider costs alone of $7,500 per month

exceeded the costs of utilizing the same amount of bandwidth on Azure which costs $500.00 per

month. The total costs of network hardware and maintenance exceeds $4,000,000 in our 5 year

TOC which again alone justifies the move to a public cloud.

The largest savings in our TOC were in the savings in hardware. Over the life of the 5

year TOC, we would spend over $11,000,000 dollars purchasing hardware while we would

spend another 2.2 million maintaining hardware we would have to inevitably have to replace.

The same compute resources can be rented per month at a cost of $44,720.00 dollars which in a 5

year span would costs 2.6 mllion dollars and save the company over 20 million in hardware

costs. These savings do not take into account the other savings such as manpower required to not

only develop Bill of Materials annually but approved and the ability to always be on up-to-date

hardware as the responsibility of hardware refreshes fall on the cloud vendor.