As useful as cloud computing is for testing new applications and use cases, entering new geographies or serving new customer segments and supporting relatively lower volume applications, cloud repatriation--shifting workloads back to private clouds, on-premises data centers or hybrid approaches--makes sense as workload volumes grow.
As often is the case, per-user charging mechanisms work very well at low volumes, often saving capital investment or opex costs. In high volume, the economics often reverse.
In other words, total cost of ownership--when an app supports high volume--often is lower when supported by on-premises data centers, rather than using a cloud service provider.
At low volumes of use, renting often makes more sense. That seems to apply for enterprises looking at edge computing, according to a Mobile Experts analysis. Over three years, “it costs about 35 percent to 55 percent more to access a hyperscaler's cloud for a heavy industrial workload at the edge,” Mobile Experts says.
“Unified communications as a service” provides a simple example of the total cost of ownership. One analysis, for example, In a 100-user situation, the total cost of ownership over a five-year period favors a premises deployment over either private cloud or public cloud, according to TTx.
The economics favor on-premises support.
On-premise UC: $220-$240 per user per year
Public cloud UCaaS: $360-$480 per user per year
Private cloud UCaaS: $250-$350 per user per year
That includes upfront capital investment and recurring costs. A rough estimate of the cost per user for the first year for each system would be:
On-premise UC: $70,000-$90,0000 for hardware/infrastructure, software licenses, endpoints, and installation/deployment support.
Public cloud solution: In a 100 user environment, in most cases the upfront costs are $0.
Private cloud solution: Highly variable but declining
On-premise UC represents costs between$120 to $145 per user, per year for ongoing maintenance, cost of upgrades and public network access.
Public cloud UCaaS has costs between $360 to $480 per user per year which includes the license cost per month and included deployment support. (This assumes an average of $30-$40 per user for licenses which includes renting the endpoints)
Private cloud UCaaS has recurring expenses between $250 to $350 per user per year for financing and 3rd party maintenance.
Cloud workloads often are the best choice. But not always.
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