This document highlights the TCO for a customer having 10000 mailboxes (as a sample) and who is making a choice between an in premise email system and a cloud email system
Cloud setups by their very nature follow the Opex model of costing. In premise setups are typically a combination of Capex and Opex costs. For in premise setups, there is a fixed upfront cost to purchase equipment, servers, storage etc and then an ongoing Opex cost to maintain and run this setup.
For the purpose of making an apple to apple comparison between a Capex intensive in premise setup and an Opex based cloud setup, we have assumed a lifetime for all capex purchased and converted these expenses into annual opex costs.
Also for the sake of building this document, we have assumed an in premise Mithi Connect Xf setup and have compared it with the Mithi SkyConnect cloud email service.
If a similar exercise is done for any other product and service, the results would be quite similar. While the content may vary, the context is the same.
We would need to start by defining the ideal architecture for an in premise setup, so that we can arrive at its annual bill of material.
In premise Email Solution Architecture
In premise setup and costing for a 10000 user workload
The picture above illustrates a basic infrastructure to host a 10000 user email workload.
It also demonstrates the various teams required to maintain and monitor the setup.
Thus to make this setup possible we will need the following components:
|Component||Annual cost* (USD)||Description|
|Infrastructure Elements and Costs|
|One Mail Server||2,500||This annual cost assumes that the server has a 3 year life (warranty) and is purchased for an upfront cost of USD 7,500|
|One Front End Server||2,000||This annual cost assumes that the server has a 3 year life (warranty) and is purchased for an upfront cost of USD 6,000|
|SAS Storage (live store)||1,680||Need 10TB of live store, which costs 168 per TB a year. SAS storage is purchased for an upfront cost of 500 per TB and has a lifetime of 3 years.|
|Backup Tape system||3,000||Considering a reliable system with multiple tapes, purchased at an upfront cost 9,000 and has a life of 3 years|
|Data center costs (for all equipment)||3,000||Co-location and network charges|
|Automated monitoring via a SaaS tool||220||Using SaaS monitoring tools|
|Bandwidth consumption||7,500||This covers the Internet bandwidth consumption, for inbound mail flow and access to the in premise servers for roaming users. This is approximately 30 mbps across all devices and locations with average assumptions of consumption patterns (peak hours etc)|
|Day shift administrator 6 people (3 shifts over 24/7)||27,000||Assumes a cost of 375 including salary and overheads|
|NOC operator 3 people (3 shifts over 24/7)||13,500||Assumes a cost of 375 including salary and overheads|
|Clean mail solution||45,000||This cost assumes a subscription of USD 4.5 per user per year|
|Connect Xf subscription||75,000||Assuming a per user per year subscription of 7.50|
|TOTAL Annual cost (A)||180,400|
|Effective cost per user per year =(A)/10000||18|
Cloud setup and cost for 10000 users
For a SaaS service, you don’t have to provision any infrastructure. Simply sign up, provision users and consume the services. The following are the components of a cloud infrastructure for an email setup. There are only 2 components to be considered by the customer, viz. The bandwidth and the internal IT team to front end the queries by the end user.
|Component||Annual cost* (USD)||Description|
|Infrastructure Elements and Costs|
|Bandwidth consumption||7,500||This covers the Internet bandwidth consumption for all the users will access the cloud setup over the Internet. This is approximately 30 mbps across all devices and locations with average assumptions of consumption patterns (peak hours etc)|
|Day shift administrator 6 people (3 shifts over 24/7)||27,000||Assumes a cost of 375 including salary and overheads. These are internal helpdesk staff who support the 10,000 users by taking back to back help from the OEM.|
|Mithi SkyConnect Venture subscription||117,000||Assuming a per user per year subscription of 11.70 for the Mithi SkyConnect Venture subscription, which offers 1GB per user|
|TOTAL Annual cost (B)||151,500|
|Effective cost per user per year =(B)/10000||15|
The table below summarizes the above mentioned numbers and demonstrates that the cloud setup is more cost effective than an in premise setup and offers tremendous benefits in terms of reliability, security and ease of scale, which cannot be easily quantified (problems in these areas lead to frequent downtimes, data loss and dips in performance, which impact productivity)
|In Premise Setup
(Based on Bare metal and Mithi Connect Xf)
(Based on Mithi Skyconnect Venture Subsciption)
|Infrastructure Costs (Annual – USD)||19,900||7,500|
|Services Cost (Annual – USD)||40,500||27,000|
|Software/Subscription Cost (Annual – USD)||120,000||117,000|
|Total Cost (Annual – USD||180,400||151,500|
|Effective per user per year cost (Annual – USD)||18||15|
|Infrastructure||Fixed for a period of 3 years, and will age in performance. When replaced, these become dead assets. The equipment cannot be easily upgraded or modified without risk or major downtime||Scalable, continually renewed infrastructure by AWS the cloud provider. Scale up/down, Scale out, Change underlying hardware, all on demand, and within minutes.|
|Equipment||Bare Metal or if virtualised, needing a virtualised environment, further adding to the cost. Difficult to upgrade without much impact.||Virtualised and objectified to allow easy and granular addition, removal and growth in the infrastructure. Most changes happen on the fly or the most with a restart. Our servers use fast SSD drives with guaranteed iops|
|Security||Physical and Virtual security of the infrstructure has to be planned, built in and monitored. In addition a clean mail solution has to be deployed in premise or via a SaaS provider||Physical and Virtual security provided by AWS. This is certified and monitored security and is a great bonus to being on the cloud. In addition Mith integrates its own firewall, rate controls, policy controls and an integrated SecureMailFlow clean mail service (in partnership with Trend Micro HES) to remove virus and spam resulting in 99.99 % cleaning of junk mail.|
|Cost Model||Capex + Opex||Opex|
|Reliability||Reliability and Redundancy has to be built into the infrastructure by careful planning, provisioning of extra resources and automated or manual processes||The infrastructure typically has 99.9% level of reliability guaranteed by AWS. In the rare case, if any S1 level issue is to occur, the instances and storage elements are designed to recover rapidly in case of a disaster, thus minimising Recovery time. In addition we over provision to add another layer or reliability to help us deliver on our guaranteed promise of 99.9% uptime.|
|Scalability||A challenge, when it comes to upgrading or scaling out the hardware. Many a times some upgrades need to go through the long purchase cycles since they are capex.||At the push of a button, we can provision larger instances, more storage and scale geographies. Unmatched ease of scale.|
|Monitoring & NOC||Need to provision a 24/7 team to work in shifts to monitor and maintain the setup.||Mithi has setup a 24/7 NOC using a combination of deep monitoring and alerting automation, standard operating procedures and trained staff to help maintain uptime.|
|Mithi Application & upgrades||Class leading Email and Collaboration Application deployed. Upgrades are typically delayed to avoid downtimes and stay away from change, leading to the customer using older versions and losing out on the benefit of the newer versions.||Class leading Collaboration application deployed and continuously upgraded to ensure that the customer is always using the latest capabilities|
|Backups and Archival||Needs a separate server and storage with separate a backup system provisioned to store the archived mail. Reliability of this system also has to be factored in, leading to higher costs||Data backups & Mail Archival on ultra reliable multi location S3 cloud of AWS. This boasts of 11 times 9 levels of reliability|