Tuesday 12 February 2013

Small Accounting Firm: Microsoft Stack Licensing and Solution Costs Example

Up here in Canada the incumbent cell providers have it pretty good. When travelling to the US we can obtain a RoamMobility plan for pennies on the dollar versus our Canadian provider’s rates.

The average small firm pays between $80 and $110 per month for each cell phone they provide to their users. This includes talk, text messaging (text, picture, and video), and the requisite 1GB to 3GB per month of bandwidth.

If we take the mid-range for this example we can say the average firm spends $90/Month so for a ten seat firm the cost is $10,800 user per year.

Now, let’s look at what the cost of a stack based solution is for the software licensing (New Open Value Agreement with the 3 Year Spread Payment option).

  • Base Server: OS for DC and WSUS+LoBs (2 VMs)
    • R18-01855 Server CAL $27 ($1270/Year)
    • 6VC-00701 RDS CAL $77 ($770/Year)
    • P73-05599 Server STD $750
      • DC + RDS/WSUS/LoBs base solution with 2 VMs stop here.
    • Solution cost: $2,790/Year
      • $23.25/User/Month
  • Add Exchange into the mix: Exchange + RDS Role moved here (2 VMs)
    • 312-03037 Exchange Standard: $439
    • 381-02257 Exchange CAL $49 ($245/Year)
    • P73-05599 Server STD $750
    • Solution cost: $1,434/Year
      • $11.95/User/Month
  • Total cost: $4,224 (Works out to $35.20/Month/User – More than half a cell contract cost)

A small single socket E5-2400 series server with 64GB ECC, Hardware RAID + flash cache, 8x 600GB 10K SAS in RAID 6 would be about $4,500.

We amortize the cost of the server over 36 months as that is our expectation for its service life.

  • Server Cost: $4,500
    • 10 Users = $12.50/Month/User amortized over 36 months.

So, our IT Solution total cost per user is now $47.70/Month.

That’s about half our cell contract cost per month per user.

The labour costs and ongoing maintenance costs would be the next thing to discuss with our prospective client. Suffice it to say that the labour and support portion would place the monthly cost per user into the $30 to $70 per month range depending on the services we provide.

Costs, benefits, and drawbacks would certainly be a part of this conversation.

  • Are there any concerns about data ownership?
  • Are there compliance regulations that need to be followed?
  • Would there be a need to grandfather communications data for legal access at a later date?
    • Note that for an accounting or law firm this situation could arise years down the road.
  • What are the risks versus benefits for an on-premises solution versus a Cloud solution?

In the end the firm gets the best solution for their IT budget and it will work with their proprietary accounting applications and/or other Line of Business applications that can be quite finicky to work with.

Plus, they can be assured that the IT Solution will more than meet their expectations for up-time and performance for its entire service life.

Remember, when it comes to the conversation we need to have with our clients or prospective clients we need to focus on the cost per month per user. Yes, there will be some sticker shock involved, there always is, but once the numbers have been put into perspective relative to the per month cost folks can begin to see the value in what they are receiving.

Philip Elder
Microsoft Small Business Specialists
Co-Author: SBS 2008 Blueprint Book

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