An Economic Analysis of Cloud: “Software as a Service” (SaaS) Computing and “Virtual Desktop Infrastructure” (VDI) Models

An Economic Analysis of Cloud: “Software as a Service” (SaaS) Computing and “Virtual Desktop Infrastructure” (VDI) Models

Wei Nein “William” Lee (University of Houston, USA)
DOI: 10.4018/978-1-4666-2187-9.ch016
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Cloud based “Software as a Service (SaaS)” computing and “Virtual Desktop Infrastructures” (VDI) are game changing technologies. Both enable convenient, on-demand access through shared computing resources as opposed to the more rigid and fragmented infrastructures of tethering on specific hardware components for computational processing. The architecture and delivery models of SaaS and VDI offer both superior flexibility and scalability in response to constant changes in organizational business requirements. This chapter provides specific return on investment analysis and business case studies leveraging the application and value proposition of these solutions. In summary, the analysis presented suggests an inevitable shift from legacy network architectures to SaaS and VDI computing is the path forward.
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“Saas” Case Study: (City Of Los Angeles)

In 2009, the City of Los Angeles entered into a contract with Computer Science Corporation (CSC) to replace the City's entire e-mail system with Google's “Software as a Service (SaaS)” e-mail and productivity solution, which includes:

  • Gmail

  • Google Calendar

  • Google Talk

  • Google Docs

  • Google Sites

  • Google Video

  • Google Messaging Security, and

  • Google Message Discovery

The City licensed seats for an estimated 30,000 users servicing all City departments. Over the proposed five-year term of the contract, the full budgetary obligation to Google is $24,518,013. Over this five-year term, the “Software as a Service (SaaS)” model is reported to bring approximately $1.5 million in savings to the City, as shown in Exhibits 1 through 4. Areas of savings include:

By moving to a “Software as a Service (SaaS)” e-mail system, 30 of the 90 servers dedicated to the GroupWise system will be retired and not be replaced; the estimated savings by not refreshing these GroupWise servers is estimated to be in the range of $350,000 to $700,000.

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