Total cost of ownership of infrastructure as a service for SME

Abstract

Cloud Computing offers significant cost benefits for SMEs that often do not manage internal IT infrastructure and start-up companies that do not have their own IT infrastructure. This paper presents a total cost of ownership (TCO) approach for cloud computing services with an emphasis on the infrastructure as a service (IaaS) model. Also, the paper presents a methodology for estimating total cost of ownership (TCO) when running computer instances in the IaaS cloud using the GARCH model to predict transaction volatility. The research results show that it is possible to successfully use GARCH models when there is historical data on the number of transactions. In addition, simulation shows that, when there are large oscillations in the number of transactions, the best choice is to reserve instances according to the Partial-Upfront price model. In contrast, if the transaction number is relatively stable, the best choice is the All-Upfront model.