RESEARCH PAPER: The Business Value of Cloud-Enabled Managed Hosting

Businesses face an almost overwhelming number of options for moving to “the cloud” to modernize IT capabilities and expand beyond traditional service models. Options include a combination of traditional on-premises datacenter capabilities and a wide range of cloud services deployment models. When evaluating the available options, IT should look beyond initial hardware and software expenses, as they are just a small piece of puzzle. A total cost of ownership (TCO) comparison over the lifetime of a project that includes capital expenses (on-premises hardware / software), operating expenses (services, support, and maintenance frees), and indirect costs (potential downtime and time-to-market delays) is a vital tool when comparing solutions. A transition to the cloud will change the TCO analysis model, as the capital expense and end-of-life requirements around hardware are removed, and business considerations must morph to include the flexibility and agility of a cloud deployment model. You can view the paper here.

Executive Summary
The Importance of IT to Drive Business Growth
Not all Solutions are Created Equal
The Benefit of Managed Services
Potential TCO Savings with Dedicated Hosting vs. a Self-Managed on-Premises Solution
Model Overview
Capital Expenses
Operating Expenses
Indirect Costs
TCO Summary
Using IT Resources to Maximize Margins
Call to Action
Appendixes
Appendix A: Hardware & Software Configuration for the On-Premises Scenario
Appendix B: Operating Expenses (Non-Personnel) for the On-Premises Scenario
Appendix C: Personnel Assumptions for On-Premises & Rackspace Scenarios
Table 1: IT Deployment Model Considerations
Figure 1: 3-Year TCO Summary of On-Premises vs. Rackspace Dedicated Hosing Solution
Table 2: Total 3-Year Capital Expenses
Table 3: Internal IT Requirements (FTES)
Table 4: Personnel Costs
Table 5: Total 3-Year Operating Expenses
Figure 2: Availability & Downtime
Table 6: Productivity Impact Due to Downtime
Table 7: Revenue Impact Due to Downtime
Table 8: Reputation & Loyalty Impact Due to Downtime
Table 9: Additional Business Impacts Due to Downtime
Table 10: Deployment Delays Due to Expansion
Table 11: Total 3-Year Indirect Costs
Table 12: 3-Year TCO Summary of On-Premises vs. Rackspace Dedicated Hosting Solution