A Brief Concept About Cloud TCO (Total Cost of Ownership)

What is Cloud Total cost of ownership?

Firstly it is essential to know the meaning of (TCO) that stands for Total cost of ownership. It is very important to invest the correct things in your company for the vital growth of your business. What assets, infrastructure is right for your business is difficult to choose. Your company employees use many methods when they have to buy or adopt any product or service. The total cost of ownership is one of these methods and it supports the business to recognize the cost of the product beyond the primary purchasing time of the product. Going and selecting a cloud is a goal for a company for saving and there are many organizations where per-user cost is extremely important but the total cost of ownership is TCO. In other words, TCO is the overall expenses and virtual cost that takes off into the IT spent and it is also important for any technology solution in examining the hidden cost. So the total cost of ownership is utilized to recognize the value and coat of included resources.

Image Credit: https://www.tierpoint.com/blog/cloud-tco/

Definition Of TCO As Per Wikipedia: Total cost of ownership (TCO) is a financial estimate intended to help buyers and owners determine the direct and indirect costs of a product or service. It is a management accounting concept that can be used in full cost accounting or even ecological economics where it includes social costs.

One point arises that how an organization calculates cloud TCO, a company makes a comparison between the cost that flows on an on-premise system and the cost that flows on a similar system in the cloud. The comparison is done on the premise of the starting price of purchasing hardware and software to the subscription cost of cloud computing and will be on a monthly basis.

Some Popular Cloud TCO Tools

♦ Google Cloud Platform (GCP) TCO Tool

Google formulated this tool, previously it was started only with App Engine but now several new features have also been added by Google under their cloud platform such as storage, networking, compute and many more services. Google does the comparison between cloud TCO and the cloud. This calculator also evaluated the cost of capital per year and it directly affects the future prices on Moore’s Law and this is completely connected with both AWS and Google Cloud. This tool or calculated endeavors on the workload and predefined instances. This tool helps the users to do the comparison with the cost of google cloud with on-premises infrastructure.

♦ AWS TCO Tool

The new edition of this tool was formulated in May 2014 with 11 currencies and our Indian currency is also included in this. AWS TCO Tool is helpful to examine the cost for virtual machines as well as for physical servers. It also delivers several cost heads containing Network, Storage, IT-Labor and Server. It is a web based tool that is created to support the organization evaluate the cost savings and benefits of utilizing AWS (Amazon Web Service) in a comparison of traditional on-premises IT infrastructure. It’s an web based calculator that aim is to provide a complete analysis of the financial suggestion of migration of AWS. This tool processes the input data and generates a overall infrastructure and select the equivalent AWS services for comparison. This tool also helps to processes the input data and generates a detailed report highlighted the differences in cost and potential savings.

♦ VMWare TCO Comparison Calculator

This tool or calculator also compares the cost between private cloud solutions and VMware server virtualization. You can find this tool on an online basis also. One of the main targets of this tool is to procure the cost comparison between VMware solution and Microsoft. The cost is only compared to characterizing the savings. This tool is created to support the organization to assess the total cost of ownership of their current IT infrastructure in the comparison with VMware’s cloud solutions. This tools is concentrate on helping the business in understanding the financial benefits of migrating to VMware’s cloud infrastructure.

Image Credit: https://advaiya.com/wp-content/uploads/2017/10/AWS-TCO-calculator.png

The above image shows the dashboard of AWS Calculator and gives you an idea  that how this tools work. As you can see there are many tab related to country, currency and at the end of the dashboard or tool page you can find the calculate TCO tab, here you can calculate the overall TCO.

IBM Cloud TCO Calculator

This tool calculator is created to help the organizations evaluate the cost saving and benefits of migrations their IT infrastructure to IBM cloud. The main purpose of this tool is to provide a detailed analysis of the financial effect of moving workload to IBM cloud. It also help the organizations to compare the total cost of ownership of their current on-premises infrastructure with the expected costs of utilizing IBM cloud services. This tool also create a complete report that breakdown that give out costs by several categories, giving insights into potential savings and cost efficiencies.

Conclusion

In today’s fast-paced digital landscape, understanding the total cost of ownership (TCO) is crucial for any organization considering cloud adoption. TCO calculators from leading cloud providers such as AWS, Azure, Google Cloud, VMware, and IBM Cloud offer invaluable insights into the financial implications of moving to the cloud. These tools enable businesses to make informed decisions by comparing the costs associated with traditional on-premises infrastructure against the benefits of cloud solutions.