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Costs

Microsoft’s BPOS: Cloud Computing’s Silver Lining?
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There are two ways to look at BPOS costs: the upfront purchase price and the total cost versus conventional software. You can go to the Microsoft Online Services page, click the How to Buy tab, then, click the Calculate estimated cost link. You could put together a list of a la carte selections, but let’s just say you want five licenses for the Standard BPOS setup, which is the minimum for getting into these Microsoft apps. That’s $75 per month, or $15 per user per month.

You could tackle the titles independently. They break down like so:

Exchange Online = $10/user/month
SharePoint Online = $7.25/user/month
Office Communications Online = $2.50/user/month
Office Live Meeting = $4.50/user/month
Exchange Online Deskless Worker = $2/user/month
SharePoint Online Deskless Worker = $2/user/month
Deskless Worker Suite = $3/user/month

With BPOS Standard, you’re practically licensing Exchange Online and Office Live Meeting and getting SharePoint Online and Office Communications Online thrown in for free. How does this compare against business as usual with running on-premise applications?

How about the cost of doing everything in-house? Let’s assume you’re a really small business with 10 employees, all of whom need access to the apps you plan to develop. Windows Small Business Server 2008 is your best bet. Windows Small Business Server 2008 comes with the basic applications you’ll need to match BPOS

  • Windows Server 2008 Standard Technologies
  • MS Exchange 2007 Standard Edition
  • Windows SharePoint Services 3.0
  • MS Forefront Email Security for Exchange
  • Windows Server Update Services 3.0

Windows Small Business Server 2008 costs $1,089 with 5 Client Access Licenses (CALs). An additional five CALs will run you $385 for a total of $1,474.

You’ll also need solid server hardware to run Small Business Server 2008 on. You can build your own for less, but expect a business class small business server to run you around $2,500 with all the bells and whistles you’ll need. So, your total cost for basic software and hardware will be $3,974 or roughly $397 per user. Assuming you can get a generous five years of service out of the software and hardware, you’re talking $80 per user per year.

Sounds cheap, huh? Well, it’s certainly less than the $180 (12 * $15) per user per year you’d spend on BPOS; a saving of $100 per user per year. But, we haven’t yet accounted for the real costs of in-house application support: the higher powered PCs you’ll need to run full-blown rather than web-based apps, local backup/restore resources, the energy costs of running the systems, the cost of floor space, all server and application version migration expenses, and the ongoing expense of maintaining server and local application-based workstation hardware and software, as well as system- and network-based applications security. We can assure you that, assuming 10 users, all of this would cost much, much more than $1,000 per year or $100 per user per year. With BPOS, Microsoft absorbs all of these costs.

This is just the beginning of our explorations into the cost of in-house vs. online applications. In the next article on this subject, we'll look in detail at costs for larger organizations, especially those needing more than 75 CALs, the limit for Windows Small Business Server 2008.

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