Overall capabilities of cloud-based Enterprise Application Integration (EAI) offerings continue to expand.  While this is occurring, the overall cost basis of provisioning those capabilities continues to drop.  This is creating situations where the financial implications of moving to the cloud are different than what experienced IT personnel have come to expect.

TCapital Expenditures vs Operational Expenditures

There are typically significant expenditures that must be borne initially, when setting up a new integration environment on premises.  Servers, Networking Equipment, Licenses for the OS, Licenses for Databases, and licenses for the EAI product itself . . . all represent significant capitalized expenditures.

Alternatively, the monthly fee structure associated with cloud based EAI offerings can present a welcome way to conserve cash in the near term, as well as enabling IT departments to move more rapidly on an EAI strategy by avoiding the (often lengthy) Capital authorization process in favor of an ongoing operational expense.

Speed of Provisioning

There are significant cost savings that can be realized by many organizations as a simple result of the speed of provisioning a new environment in the cloud.  New virtual machines are typically available within 24 hours of provisioning (if not instantly).  This decreases the dead-time typically involved in creating new environments, and has inherent cost savings.

Hard Costs of Provisioning

Cloud based integrations allow organizations to avoid the costs associated with setting up a new environment.  These costs include not only the typically-accounted for costs like hardware and licensing, but also the cost of professional services to install and configure those environment.

Maintenance Costs

Provisioning integration services in the cloud also allows companies to avoid the costs associated with maintaining the environments associated with the integration servers.  Typical costs associated with system administration, patching, power, cooling, space, etc. . . are all rolled into a single fee, in a cloud based model.

Capacity Scaling

Many Cloud service offerings (such as Microsoft’s BizTalk on Azure) bill based on capacity used, and provide some sort of capacity based auto-scaling.  This essentially means that if your message traffic has high volume “burst” times, coupled with low volume times . . . your cloud integrations solution can scale available resources (and charges) to match your actual usage.

Using this approach can deliver significant savings for an enterprise when compared with the fixed costs of an on-premises license and server, which is only used to capacity a fraction of the time.

These financial implications are just a few of the more obvious ones related to making a decision about on premises integration vs cloud based integration solutions.  There are many detailed factors to take into account when making a decision of this type, and Art2link’s experts can assist in making the best possible decision for your business.

For more information, contact Art2link at 317.660.6288 or Felicia Tonnis, Felicia.T@art2link.com

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