By Sam | January 3, 2016

Insider’s Guide To Credit Union Hosted Servers – Calculating TCO

We are continuing our series on the components of building your Credit Union cloud with today’s post on Credit Union hosted servers. In our first post on this topic, “5 Steps To Build Your Credit Union Cloud” we outlined a very deliberate and strategic path to move your Credit Union to the cloud. We explained how managed services are giving Credit Unions a new competitive advantage over those struggling to meet the increasing demands of operating complex IT infrastructures. The 5 steps were:

• Move to Managed Telecom
• Move to Managed Security (integrated locally and offsite)
• Move to Managed Disaster Recovery (DRaaS)
• Move to Hosted Servers
• Move to Service Bureau (core)

Move to Hosted Servers

Ah, where to start with the concept of Credit Union hosted servers? In my previous life as a VP/IT at a Credit Union, I think we were up to somewhere around 80 or so different servers (physical!) at some point – can you imagine the patching, managing and security oversight that took. To give you an idea of the lopsidedness that happens with resources when your infrastructure explodes like that, out of a 12 person team, only TWO (2) were dedicated to the core. Crazy huh? Smart CIO’s are starting to capitalize on hosted technologies to better align their teams with the Credit Union’s strategic goals. Is a managed/hosted server architecture right for your Credit Union? Let’s break it down.

The TCO (Total Cost of Ownership) of hosted servers involves 5 separate areas – Production Data Center, Production Server, Production Software, DR Solution and Production Labor.

1. Production Data Center – the first thing that normally comes to mind when calculating the costs of hosted solution is inventorying what you have in production.  When gathering data to determine if hosted servers could be a solution for your Credit Union, remember to include the costs associated with production:
   • Space and Power
   • Cooling
   • UPS
   • Generator
   • Fire Suppression
   • Security
2. Production Servers– After the data center is taken care of in terms of physical requirements, it is time to dig in and inventory/calculate your servers that could be hosted. Costs you should gather before talking to a potential MSP for this area are:
   • Actual server cost
   • Storage (SAN/NAS)
   • Switch
   • Firewall
   • Cabling
3. Production Software – All that hardware doesn’t do your Credit Union much good without software.  Your Credit Union should look for the costs surrounding this area:
   • Virtualization
   • Microsoft Licensing
   • Management Tools (AV, Patch, Monitoring)
   • Load Balancing
4. DR Solution/Backup Strategy – One of the advantages of moving to Credit Union hosted servers infrastructures is your disaster recovery costs can be significantly reduced. Why? Because the MSP should provide the redundancy as part of their overall solution, that’s why! When comparing costs from your existing method to a Credit Union hosted servers strategy, remember to include:
   • Data Vaulting/Backup Software(s)
   • Backup Hardware
   • VM and MS Licensing
   • Administration/Management
   • Disaster Recovery Testing and Reporting
5. Production Labor – Labor costs can be hard to quantify for any sort of cost comparison/Total Cost of Ownership. When approaching a potential MSP, consider the following labor costs for your team to:
   • Installations
   • Patching, AV, Upgrades
   • Compliance Reporting

Making the move to a Credit Union hosted servers infrastructure should be high on your priority list for the coming new year. A managed services provider can be a huge cost saving for your Credit Union . But more importantly, the expertise of the MSP will strengthen your security and responsiveness strategies and allow your internal IT team to focus on more strategically aligned functions.

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