Telstra claims SMEs can save big by using cloud services

Stuart Corner
Tuesday, 08 November 2011 09:23

Telstra claims that, by using its cloud computing services, a small business of only five people could save about $10,000 over three years, or about 70 percent of the cost of a comparable in-premise solution.

 

Telstra asked Castalia Strategic Advisors to model the cost to a small number of typical small/medium businesses from using Telstra's cloud platform virtual server solution compared to the cost of a traditional in-premise solution where businesses purchase and operate their own server hardware and software.

Castalia said its approach was to estimate the difference in the net present value (NPV) of the incremental costs of server service provision for five different small/medium businesses adopting Telstra's cloud-based virtual server solution versus adopting an in-premise solution.

Each of the five businesses modelled were selected as the type of business that would use a particular Telstra basic virtual server package:
- A law firm with 5 staff: Express package;
- An international immigration and recruitment specialist with 20 staff: Essential package;
- A government authority with 30 staff: Enhanced package;
- An accountancy firm with 45 staff: Select package;
- A consulting firm with 70 staff: Premium package.

Castalia found that, over three years, each of the five businesses modelled would save money by adopting a cloud virtual server solution rather than a traditional in-premise server solution. "Our modelling shows that businesses have the potential to save between 10 and 70 percent of the cost of an in-premise server solution by using Telstra's cloud-based server, depending on their size and data usage," it said. "If in-house hardware were to be kept for five years rather than the standard three, the after-tax savings from using a Telstra solution are two to twelve percentage points lower, but still significant."

Castalia estimated that the largest business, with 70 staff, would save about $20,000 over three years after tax, or about 20 percent of the cost of a comparable in-house solution. A small business of only five people could save about $10,000 over three years, or about 70 percent of the cost of a comparable in-premise solution.