On-premise versus Cloud
Comparing the Costs of On-premise versus Cloud-based Integration
The “cloud” is a hot topic these days as companies look to reduce costs and management overhead of IT operations. Beyond the hype, cloud platforms are a powerful consumption model for IT challenges, including B2B integration. One of the strongest benefits of cloud-based integration is cost, as you pay only for what you consume and you can pay as you go with a monthly subscription fee. In contrast, many of today’s on-premise solutions require a hefty investment in hardware and/or software. Cloud integration solutions eliminate the need for on-premise hardware or software, and allow you to start small and scale as needed.
Whichever approach you take, make sure the solution meets the needs of your extended enterprise and provides seamless connections and collaboration across your internal and external business communities.
Cloud B2B integration delivered as a service can save you 50% and hundreds of thousands of dollars compared to on-premise solutions.
Traditional On-premise Integration Costs
The list below is based on real-world customer environments but may vary from your situation. These companies were using a myriad of integration solutions to manage integration communities that used EDI and many other formats. This cost analysis was based on 100 connections (trading partners or customers) and 10 million transactions.
Total Cost of On-Premise Integration: Nearly $1 million per year
- EDI Translator: $20,000
- FTP Server: $25,000
- Routers: $700
- Servers: $20,000 (does not include software)
- Partner On-boarding and implementation: $20,000
- Annual & Monthly VAN fees: $100,000
- EDI Transaction fees: $250,000
- Mapping Solution: $40,000
- Database: $50,000
- IT Staff: $400,000 (four FTE)
- TOTAL: $925,700
Cloud B2B Integration Delivered as a Service Costs
Let’s look at the same list of variables for an integration solution that leverages a cloud platform delivered as a managed service. As with the above on-premise scenario, this cost analysis is based on 100 connections (trading partners or customers) and 10 million transactions.
Total Cost of Cloud Integration: Approximately $355,000 per year
- EDI Translator: $0
- FTP Server: $0
- Routers: $0
- Servers: $0
- Partner On-boarding and implementation: $5,000
- Annual & Monthly VAN fees: $300,000 ($25,000 per month)
- EDI Transaction fees: $0
- Mapping Solution: $0
- Database: $0
- IT Staff: $50,000 (1/2 an FTE)
- TOTAL: $355,000