How to Choose the Right Cloud - Advanced Design Approaches to Emerging Software Systems - page 234

• The price per user for the hosted solution is

calculated based on the Professional sup-
port offer of Salesforce 65$ per user per
month. (The prices of other providers pres-
ent slight differences that do not distort the
results).

chine considering no costs for middleware)
to 70000$ when using commercial middle-
ware (for example Oracle database server
(47500$) and Windows (400$) or other
commercial products). An average price
considered in the analysis is 30000$.

• The number of in-house servers is consid-

ered to be three; data base server, appli-
cation server and web server. Three- tier
architecture is a popular model adopted
by many similar applications, therefore
selected in this study. In all of the servers
the appropriate middleware is installed and
the relevant costs should be considered.
Considering that the middleware can be
either open source software or commercial
solutions, the total infrastructure costs can
range from 9000$ (3000$ per server ma-

• Application support and maintenance costs

in an on premise solution are calculated as
18% of the development costs. Professional
Services are calculated as 75% of the devel-
opment costs. For the next four years they
are calculated as 25% of the development
costs. Customization and integration costs
for the first year are calculated as 75% of
the development costs and for the next four
years they are calculated as 10% of the de-
velopment costs. The percentages used in

Table 11. 5 year cost analysis of hosted and on premise software deployment

Cost Category Cost driver Year 1 Year 2 Year 3 Year 4 Year 5

Hosted Infrastructure Costs included included included included included

Software Costs Number of Users 7800$ 7800$ 7800$ 7800$ 7800$

Professional
Services

5850$ 1950$ 1950$ 1950$ 1950$

Customization 5850$ 780$ 780$ 780$ 780$

TOTALS 19500$ 10530$ 10530$ 10530$ 10530$

On premise Infrastructure costs Hardware +

middleware

30000$ 1500$ 1500$ 1500$ 1500$

Network Infrastruc-
ture (including in-
ternet)

19000$ 19000$ 19000$ 19000$ 19000$

Power, Electricity 12000$ 12000$ 12000$ 12000$ 12000$

Floor Space 12000$ 12000$ 12000$ 12000$ 12000$

Software Costs Development costs 48242$ 0 0 0 0 $

Application support
and maintenance

8683$ 8683$ 8683$ 8683$ 8683$

Customization and
Integration

36182$ 4824$ 4824$ 4824$ 4824$

User Training 1500$ 750$ 750$ 750$ 750$

TOTALS 167607$ 58757$ 58757$ 58757$ 58757$

TCO Hosted 61620$

Tco
On premise

402635$