TCO for Cloud Services: A Framework

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One of the common justifications for moving to cloud services is cost savings, but the data are often insufficient to support such claims due to the inherent challenges in effectively identifying and comparing the total cost of ownership (TCO) for both cloud-based and on-premises fulfillment of IT services. The ability to effectively compare TCO is essential to understanding the complete impact on our institutions and the attendant shifts in costs as we migrate to the cloud. Clarity about TCO also underscores the strategic shifts in IT service delivery that higher education is experiencing. To address these challenges, the ECAR-TCO working group has created a TCO framework, the application of which will help institutions effectively understand and analyze all costs associated with running a system or service on-premises versus moving it to the cloud. The framework enables more accurate identification of the cost to a specific department, as well as the cost to the institution as a whole.