I sat with a client recently who was deciding between an on premise and a cloud solution. Both provided equivalent features and capacity. He pulled up the calculator app on his iPad and worked through a quick Net Present Value calculation on the cloud solution.
"You could charge me 10x more for support and maintenance and cloud still wouldn't be worth it."
A Forbes article this month approaches this same topic from a more simplistic angle. The takeaway is still the same - the monthly payment option never produces the lowest total cost.
However, the opportunity cost of investing in IT can be huge. Would you rather put $50k into new servers, or a years base salary for a new sales rep? The sales rep is likely to generate far more revenue than IT ever will, unless you fire him in six weeks.
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