Cloud TCO calculator for SMEs goes live

13 Mar 2013

David Owens, managing director of Let's Operate

Hosted desktop provider Let’s Operate has launched a new total cost of ownership (TCO) calculator that allows SMEs to compare the actual cost of their current traditional IT with that of implementing cloud computing.

The TCO tool may be accessed on the Let’s Operate website or through its channel partners.

“It may be heresy to say it, but cloud vendors could be over selling cloud computing and hosted desktop on the basis of operational cost savings alone,” said David Owens, managing director, Let’s Operate. “The cost analysis must go deeper than this which is what our TCO calculator is designed to do. It analyses capital expenditure, operational expenditure and opportunity cost for individual firms.”

He added, “It is true that with hosted desktop you don’t have to replace ageing servers, pay for expensive software licences or hardware upfront and you do enjoy the huge productivity benefit of anytime, anywhere access. However, actual operational costs may or may not be lower and in my view hosted desktop should not be sold on the basis of operational cost savings alone.”

He said the new TCO calculator allows companies, who may be thinking about cloud adoption, to do the maths before taking the plunge. “It is a great tool to present to managing and finance directors to make sure that the business case stacks up.”

Let’s Operate’s Total Cost of Ownership Calculator is available free and it was developed by a team led by Owen, who is a former lecturer in quantitative methods and statistics.

It allows SMEs and channel partner customers to compare the actual cost of traditional IT to hosted desktop. It automatically generates detailed five-year forecasted cashflows, comparing the total cost of deploying a traditional on-premise IT infrastructure with that of hosted desktop. These detailed cashflows are broken down into capital, operational and opportunity costs.

The Let’s Operate TCO then generates a ‘Savings Analysis’ which presents ‘best case’, ‘worst case’ and ‘most likely’ cost-saving scenarios. This enables companies to evaluate what they stand to save on their total IT spend, as a per month per user cost.

“Our experience is that there are obvious capital expenditure savings and cash-flow benefits associated with a move to hosted virtual desktop. Real bottom-line business benefits and efficiencies really start to kick in when you examine the opportunity costs,” Owens explained.

“We have estimated that in professional services, for example, if a solicitor or accountancy partner can add even one billable hour per week this is equivalent to an increase of €4,500 a year in additional fee income. Cloud and virtual hosted desktop allows this to happen,” added Owens.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years