Google Cloud includes all kinds of tools optimize the migration process and work in the cloud. In this post we will discover what is TCO, the tool that allows us to monitor the values and results obtained when we acquire new services.
Now the TCO or Total Cost of Ownership, in Spanish Total Cost of Ownership, allows us to assess the costs and benefits both direct and indirect related to any acquisition we make of a product or service.
In the IT field These costs are usually high when we take into account that we are considering an infrastructure, the management of the environment to be deployed, backup systems, network configuration, security systems, etc. Added to this is maintenance where, on the one hand, one or more people will be in charge of ensuring the proper functioning of the entire infrastructure, and on the other, the hardware, which must not only be updated but can also suffer failures, which is why it is It is important to keep this in mind.
Therefore have a TCO serves to not neglect any of these components, to know in depth about them and obtain greater accuracy in the ROI "Return on investment".
2. What is the TCO for?
This tool has many benefits for companies, allowing specific control of the investment. Among the utilities that the TCO has, it offers the possibility of:
When negotiating with a supplier, being able to argue the cost-benefit relationship and being able to obtain some type of discount.
Evaluate the return on the investments made, giving the possibility of having greater clarity in the margins obtained from the services provided.
Self-criticism and improvement capacity for future investments.
In the medium and long term, improve financial performance.
It is a support for decision-making when evaluating a change in the on-premise structure to the cloud.
3. Understanding TCO in Cloud Computing
The TCO in Cloud Computing works in a similar way to Total Cost of Ownership, but with a key differential factor. And it is that with this service we put aside contemplating hardware updates and provisioning due to possible failures. This is because in the cloud we should not worry because a component breaks, and if we need, for example, more computing capacity or storage, we can upload it in a configuration but it does not imply changing all the hardware.
In order to have a better understanding of the differences and impact on TCO, we must make a comparison of some scenarios between a local deployment and one in the cloud.
3.1 Local Server
A local server requires hardware, a CPU, mother, RAM, Cabinet, Source and the storage space either hdd or ssd. Once everything is assembled, you have to configure it, install the operating system with which you are going to work, security, deploy the tools and carry out the tests.
In addition, you have to add a security system in case of power outages protect the server and contemplate provisioning a fund in case any of the components fail and must be repaired or replaced, and even for a possible upgrade. Finally, a technician must be in charge of controlling the correct functioning and state of the hardware.
3.2 Cloud Computing
At the other extreme is the cloud computing, where can we deploy a virtual machine with the necessary specifications for the installation of the server, in case you need to upload the capacities we can do it in a few steps.
The cost that will impact the TCO will be the monthly cost in relation to the technical requirements in the deployment, the licenses mounted on the server and, if necessary, a specialist who can carry out the process in the cloud. In this way, we forget about the cost of hardware maintenance and provisioning for possible failures, fixes or improvements.
The same happens in the case of databases, all the problems of the server have the same differences, and in terms of storage capacities that tend to be affected more often they are solved since the local cost is to increase the capacity. In the cloud simply the more we occupy the higher the cost, but the lower it is, the more it will be reduced, this is because there is the possibility that only what is actually being consumed is billed.
4. What is TCO in GCP?
In order to estimate or compare the TCO in Cloud Computing from Google There are tools like price calculator, which allows us to estimate the detailed monthly invoice for each tool that will be used and contemplating the technical specifications, thus obtaining a value very close to the real one.
In addition, many of the available solutions have free layers which we talked about in our article on Google Cloud Platform free, which directly influence the monthly costs and therefore the TCO calculation.
Among other benefits that we can find in GCP that have a direct impact on the calculation is that there is automatic discounts for sustained use of the solutions and billing per minute at a fixed price in the case of interruptible virtual machines.
