In FY 22, the organization would like to move its current servers to the cloud. These servers
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Question:
In FY 22, the organization would like to move its current servers to the cloud. These servers are currently located in our Denver offices. The following factors apply
- The server room occupies an entire floor and requires specialized air-conditioning to regulate temperature on the floor, approx. annual cost of 10k
- We have 10 servers, each server costs approx. 10K and has a 3 yr life
- The building where the servers are located is aging and has dated infrastructure which is subject to constant failures resulting in outages for our network. A typical outage can last for 3 hrs and and can result in billing losses of approx. 6k per outage. In FY 21 we had approx. 20 outages and in FY 20 we had 17.
- We have received the following quote for hosting from 3rd party providers, initial implementation cost of 200K and an annual hosting cost of 50K
- We also currently outsource our server support services to a 3rd party vendor for 5K per month.
Using the above information and considering time value of money, and terminal value, please tell us
- How would you evaluate this decision for its financial viability?
- What additional considerations would you take into account besides what is mentioned above to evaluate this decision?
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