Four Ways Moving Your On-premise Archiving to the Cloud Makes Good Financial Sense

By Koert Vandenenden on August 27, 2015
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Koert VandenEnden

Director of Finance

Koert has over 13 years of experience working with technology companies in various financial and accounting capacities.

  

When evaluating on-premise archiving versus archiving in the cloud, it is paramount to evaluate the financial considerations. If you are responsible for procurement, financial forecasting or budgeting in your organization, moving over to cloud archiving can potentially allow for sizeable cost savings. 

At a high level, cloud archiving allows your organization to transfer a significant portion of maintaining its compliance archiving and eDiscovery infrastructure from a one-time capital expense to a recurring cost. By doing so, your organization can realize significant reductions in total cost of ownership (“TCO”). In fact, these cost savings become greater the longer the period over which the TCO is modelled. 

Here are some of the key areas where a cloud-based solution can generate savings over a traditional on-premise solution:

Replacing up-front capital investment with a recurring monthly cost

  • Avoid building your own data center. Capturing and storing billions of messages without the risk of data loss requires a heavy investment in server hardware and network infrastructure that includes racks, servers, power supply - and the real estate that these take up - plus the cost of specialized employees or contractors to install, configure and test these systems.
     
  • Reduce exposure to variability of operating expenses. With a cloud solution, the cost of delivering the service becomes the responsibility of the vendor rather than your own organization. Costs that are avoided include operating expenses (largely for power and cooling) and payroll (server monitoring and maintenance, engineering and support staffing).
     
  • Avoid up-front software license fees and subsequent annual maintenance costs.

Attaining scalability

  • Services can be purchased from a cloud-based vendor on an as-needed basis. As you increase your employee-base, acquire additional businesses or divest of operations, you can scale your services up or down as needed. This allows you to take a relatively fixed cost and turn it into a variable. Additionally, experienced cloud service providers like Global Relay will most likely have specialized professional service teams dedicated to eDiscovery and a data services team that is available when you need it. 

Eliminating the cost to ensure uptime

  • For a cloud provider, uptime is absolutely paramount, and much is invested to ensure uptime of services. Reputable cloud service providers including Global Relay will have data centers with redundant equipment at all levels, 24x7 staffing to monitor those systems, and the specialized technical knowledge available to fix any issues when they are identified. The benefit of all this—improved uptime—is available to our customers without the added cost of purchasing redundant and frequently idle equipment, or employing the necessary people to run that equipment. 

Avoid asset refresh

  • The cost of spinning hardware (primarily data storage & software servers) is significant, and this hardware generally has a useful life of only 4-6 years. TCO models that have a limited horizon frequently don’t take into account the need to purchase new hardware, and the cost to configure, test and implement that hardware. 

The specific circumstances of each organization will generate different results when evaluating the cost differences, but our observations suggest that for an enterprise with approximately 10,000 end users, the average savings in TCO would be an estimated 40% over a 5-year period. 

 

Click here to learn more about our private data center and transitioning to the cloud.

 

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