Lowering the TCO

A university that shall remain nameless wanted to provide its students with an easy web-based way to store, share and publish documents online. They’ve decided to go with a hosted solution based on Sharepoint Portal Server. This only works properly with Internet Explorer on Windows, so you’re out of luck if you own a Mac, if you run Linux, or if you like to use Firefox. It’s also slow, clunky and somewhat confusing.

Oh, and the TCO for this solution is €16 per student per year. So with 30000 students, this system will cost the university €480000 each year.

We created a simple demo application to illustrate how we think this application should work. Our estimated TCO for a full-featured version is €4 per student per year, so with 30000 students, the total costs will be €120000 per year.

The requirements called for 250MB of storage for each student, so a big part of our TCO estimate was based on a cool 15TB storage and a huge amount of bandwidth.

In the last few week we’ve been playing with the Amazon S3 storage service and we’ve created a version of our demo application that uses S3 as a storage back-end. Amazon charges $0.15 per GB per month for storage used and $0.20 per GB of data transferred. This translates to a rough yearly estimate of $45000 (that’s currently about €35600) for storage and bandwidth.

Now let’s combine this figure with a one-time investment of €40000 for the development work and €2000 yearly for hosting, support and maintenance of the front-end application. For the sake of the argument, let’s spread the costs our over 3 years. This gives us a yearly cost of about €60000 and a TCO of about €2 per student per year.

With S3 you only pay for storage and bandwidth you’re actually using. This means you probably never reach this figure because most students will never use their full 250MB and the system will only slowly fill up.

This is all just a rough estimate, so I am likely to have it completely wrong. But probably not so wrong that you ever need to spend nearly as much money as this university is doing now.