View the step-by-step solution to:

Question

Imagine that an old company of 100 employees is trying to move to the cloud. The "X" company is exploring a

migration from full on-premise model to a cloud-only solution.  "X" company have hired you to conduct a 5 -year Total Cost of Ownership (TCO) analysis. Note that after the migration, the "X" company will transition from software license costs to a subscription-based mode. Consider the following parameters:


The on-premise model employs three full-time engineers and the cloud model employs one full-time engineer.

The salary of one full-time engineer is €70,000 per year

Cloud application costs (subscription fees) per user/per year = €1,200

Users =100



tco.JPG


*Costs in the table above are expressed in Thousands of euros i.e. €1 = €1,000.


Please answer the following:

a)      Calculate the relevant missing costs for each model.

b)     Calculate the TCO for each option. Which option is cheaper and by how much?

c)      If the cloud model also employed three engineers, would it make sense to move to the cloud from a financial perspective? If TCO cost were roughly equal, critically analyze weather it would make sense to move to the cloud?

tco.JPG

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask Expert Tutors You can ask You can ask ( soon) You can ask (will expire )
Answers in as fast as 15 minutes