Several weeks ago we touched on why the big move to Cloud Computing. As we announced one of the main reasons we were acquired was our leadership in the area of Software as a Service (SaaS) in the Cloud. Today we will discuss the concept of Total Cost of Ownership (TCO).

What is the real reason?

In our Digitizing of America newsletter we showed the following graphic:

The reason why the growth has been so explosive is cloud costs less money overall. In our industry we measure that by the TCO. As an easy example to follow we will look at the TCO for a truck, something most of our food guys can relate to:

Annual Truck Expense

  • Cost of Truck with Refrigeration (lease)
  • Diesel Expense per year
  • Cost of Insurance
  • Maintenance costs
  • Salary of Driver
  • Taxes and Licenses

When it to comes to SaaS it gets a little more complicated because our nomenclature and all the costs aren’t always apparent. Here is a list from Wikipedia of all the costs you need to look at for what is a traditional “on premise” solution:

  • Computer hardware and programs
    • Network hardware and software
    • Server hardware and software
    • Workstation hardware and software
    • Installation and integration of hardware and software
    • Purchasing research
    • Warranties and licenses
    • License tracking - compliance
    • Migration expenses
    • Risks: susceptibility to vulnerabilities, availability of upgrades, patches and future licensing policies, etc.
  • Operation expenses
    • Infrastructure (floor space)
    • Electricity (for related equipment, cooling, backup power)
    • Testing costs
    • Downtime, outage and failure expenses
    • Diminished performance (i.e. users having to wait, diminished money-making ability)
    • Security (including breaches, loss of reputation, recovery and prevention)
    • Backup and recovery process
    • Technology training
    • Audit (internal and external)
    • Insurance
    • Information technology personnel
    • Corporate management time
  • Long term expenses
    • Replacement
    • Future upgrade or scalability expenses
    • Decommissioning

This can be almost impossible to figure for any laymen not in our industry, but one of the software advisory sites Software Advice has posted a calculator to help. We decided to do the work for you showing the cost of a 4 user on premise system compared to our Food Connex Cloud SaaS offering.

Click to Download the
Free TCO Data Sheet



If you’re heading to the expo,
be sure to stop by Booth #967.





Issue 646 - Checking those Resolutions.

Last year we were early to declare our New Years Resolutions 2018. A lot has changed over in 2018, but I believe it's not quite too late to make sure we have addressed some of those resolutions.

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