Comparison between physical and cloud infrastructure for a small business technology upgrade

Abstract

Technology makes the business world go ‘round and it does not matter if it is a large corporation or small business, they are both affected equally. While It is true that large corporations have much more complex outcomes around technology decisions, they still must make the same general decisions as a smaller business. These decisions often boil down to a common choice, buy or rent. With the current trend in technology the question of rent versus buy comes down to whether a business wants to purchase and maintain its own infrastructure or rent those services from another company. This paper explores the difference and similarities between the two options and offers some data points to assist in the decision making. There is a comparison between the benefits of each choice as well as a discussion of potential pitfalls that might be encountered. A numerical analysis was performed to determine the cash flow for the two choices as well as an adjusted cash flow to correct for the time value of money. After all the analysis it was determined that while most businesses would find on-site infrastructure to be a competitive option and worth consideration the greater efficiency and safety with the cloud hosted option allows it to have the lower overall cost.