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Enterprises can save 25 per cent of IT costs by moving to private cloud, claims Nokia

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© Flickr/cc-licence/Bob Mical

  • Nokia releases its Enterprise Private Cloud Total Cost of Ownership analysis model
  • Claims a minimum of 25 per cent savings over five years and break-even in three
  • Analysis applies to OpenStack-based private clouds with SDN technology
  • Nokia offering a custom analysis free of charge for large enterprises

Large enterprises should switch across to a private cloud from their legacy IT environment and save themselves significant money in the process. That’s the conclusion of Nokia, which estimates that enterprises can save at least 25 per cent on their IT costs over five years by moving to a private cloud, and can expect to break even on their private cloud investment in less than three years. Obviously, Nokia knows just the people to help them with such a move…

Nokia says its Enterprise Private Cloud TCO Model analysis is the first of its kind in the industry. Previously, the rationale for this transition has typically focused on the operational and business benefits, in terms of flexibility, agility and the ability to scale quickly. The new analysis instead asks the question: “what are the cost benefits of this move?”

The model shows that the common assumption that private cloud is too difficult or costly to adopt is wrong, and that large enterprises should make the move directly to private or public-private hybrid cloud because it utilizes off-the-shelf components and is less expensive. The analysis takes the overall operational budget of the enterprise data centre and then provides a high-level breakout by the software or operational tasks performed, which was then used to calculate potential cost impacts - both increases and decreases - for a cloud environment.

"Most advocates for the deployment of a private or hybrid cloud in large enterprises focus their arguments on the benefits offered by a cloud approach,” said Mike Loomis, head of the large enterprise segment at Nokia. “While these claims in many cases are legitimate, our model differs by addressing the core concerns most enterprise IT managers have: is this move worth the investment, and are the savings really there? Our analysis provides a resounding 'yes'.”

Nokia's financial model is based on a private cloud, or private-public hybrid cloud architecture that can be built at any large enterprise today, incorporating commercial components from a variety of vendors as well as open source components including OpenStack cloud management software. The model also assumes that the cloud architecture is one that does not require 'forklift' replacement of the IT environment, but instead sits on top of the existing IT infrastructure as an overlay.

"More and more enterprises are embracing OpenStack-powered private clouds for their performance advantages and their cost savings - both over public clouds and proprietary private clouds,” said Lauren Sell, VP Marketing and Community Services at the OpenStack Foundation. “The Private Cloud TCO Model developed by Nokia is the latest example of OpenStack community members creating valuable and validated tools that can help enterprises as they plan and execute their strategies for agile, open cloud."

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