White Paper

The FDs dream IT budget

How cloud technology helps strip out financial inefficiency,

reduces TCO and increases ROI from IT budgets

www.servicedcloud.com
Introduction
Who would be a finance director?

It is highly pressurised and can sometimes seem like a thankless task. Sales and purchase ledgers, cash flow and working capital;
audits and HMRC reporting; expenses, salaries and headcount. The list can seem endless, with practically every aspect of business
finance carrying a high priority and needing to be diligently dealt with in a timely fashion.

While members of the executive peer group are likely to enjoy strong relationships and high levels of trust, the confidences of
management that are shared between senior executives often throw up barriers to others. Employees may be unable to truly warm to
the C level, with polite and cordial respect the best way to describe such relationships.

However, FDs may sometimes find that they are in a lonelier place. Invariably, financial decision making means the FD has oversight
in more areas than anyone else; this undoubtedly leads many to look suspiciously on the role and unfairly characterise practitioners
as bean counters.

Whatever the perceptions, the universal truth is that a business without strong and competent financial control is very likely to go to
the wall before too long.

One of the trickiest areas is managing the finance of technology. The pivotal position IT enjoys in the vast majority of businesses
means spend is likely to be a matter of some priority. Budgeting accurately for the IT fabric of the business remains a central
objective, however,technology cannotbe a bottomless pit into which you throw cash. Budgets need to be developed to support the
strategic use of technology in the business without breaking the company finances.

Any decision made in support of equipping the organisation with the right technology tools to enable efficient effective productivity
and operations has to deliver demonstrable ROI. In this guide, we set out how cloud technology brings these threads together and
provides a better way to financially plan for business technology by enabling dream budgets.

Technology in smaller and growing businesses

Many businesses with 10100 employees can be in between a rock and a hard place when it comes to technology. They are big
enough to find IT is critical to the business yet too small to be able to be self-dependent when technology is broken. They simply lack
the in-house tech expertise and systems redundancy that mitigate the risks of IT failures.

Fed up with annual IT budgets that look like this?

Below is the IT budget for a typical business with 50 people that follows the conventional on-premise approach and provides in-house
systems. This is likely to look familiar, if somewhat wearying to many finance directors in companies of this size.

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 DESCRIPTION IN HOUSE SYSTEMS CAPEX OPEX

PCs / End User Devices PCs and Laptops @ 700 but often more Approx.35,000

Typical lifespan of 3 years

New computers need setting up,

and configuring

Up to 2 hours per computer @ 50

Servers 3 servers with storage and UPS systems Approx. 25,000

Software Licensing Email Security Software like Mimecast. 15,000 18,000

Windows PC & Server Operating Systems

Microsoft Office

Anti-Virus

Database Software (e.g. MS SQL)

Email System Software (e.g. MS Exchange)

Management Software

SSL Certificates

Telecoms A phone system for 50 users handsets 20,000 6,000

and system will have a capex cost of about + call & DDI number

20,000 charges

ISDN 30 e phone lines will cost around

1,500 a quarter plus calls and DDI

numbers

Electricity Electrical power to run servers and network, Approx. 3,300

PCs and monitors and air conditioning

IT Management 4,000 a month for a good IT guy (plus 60,000 +cover

maybe additional support for specialist apps

or holiday cover)

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 DESCRIPTION CAPEX OPEX
Maintenance PC Maintenance Costs Approx. 24,000

Each PC and laptop needs securing and

updating. This means Operating System and

Application software patches, antivirus and

anti-malware updates, Java Updates driver

and firmware updates. Additionally, PCs

often need maintenance such as removal

of temporary files, registry optimisation and

disk defragmentation.

Servers need updating, patching, back up,

etc.

Estimated at 2,000 in labour per month to

maintain 50 devices & servers

Disaster Recovery Duplicate Data Kept off site Servers 5,000 6,000

replicated + fees

Fees charged if the DR system is actually

used

Setup costs A new 50 user system could cost 20,000 Approx. 20,000

to set up and configure and customise.

Totals Approx. Approx.

120,000 113,800+

Conventional on-premise IT
Maintaining in-house IT systems - the conventional on premise approach to provisioning business technology - always brings
ownership. With ownership comes the requirement for capital as well as annually recurring costs to run the IT assets. It also brings
depreciation to zero typically over a three year period.

Essentially, in the absence of an alternative model no one questioned that it needed to be done, even if the scale sometimes caused
raised eyebrows. The continual requirement to update the IT estate means that major investment in some part of the IT fabric
inevitably falls in every annual reporting period.

In the example above, we have made reasonable assumptions and if you compare them to your company budget for on-premise IT
pro-rata per user, it is unlikely to be too far out.

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But what if your annual IT budget looked like this?
Below is the budget to provide the same IT capability but by using a Hosted Desktop system based on a secure private cloud platform.

DESCRIPTION HOSTED DESKTOP ON SECURE CAPEX OPEX

PCs / End User Devices Thin Clients or Zero Clients @ approx. 250 12,500

Typical lifespan 5 years

Setup can be completed without technical

assistance, and can be done in less than 15

minutes per device

Maintenance On Site Maintenance is limited to local 2,000

network and Thin Clients

Hosted Desktop Rental Includes: 0 30,000

Servers

Software Licencing

Telecoms

Support

Disaster Recovery

Free Setup

IT Management Support is included in the cloud and migrate 60,000

your IT manager to a more strategic role

Totals 12,500 92,000

The alternative Hosted Desktop and the consumption model

Cloud based-technology enables a Hosted Desktop solution to be provided from a secure private cloud. This delivers applications and
data over business-class broadband internet connections, letting those that need access to standard productivity and communica-
tions tools to consume IT as a service through low-cost devices known as Thin and Zero clients.

The number crunching, processing, or compute whatever you prefer to call it - is carried out in the cloud on powerful servers in
purpose built and maintained data centres. This eliminates the need for expensive servers, storage, and backup as well as PCs and
laptops on-premise.

Software maintenance for servers and PCs is also eliminated. End user support may continue to be delivered by your IT manager who
is freed to pursue a more strategic agenda. A considerable reduction in electricity consumption also results.

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 Power Users such as mobile workers that need to remain working on laptops or graphics and media workers that need powerful
desktop compute capability are readily accommodated within Hosted Desktop environments.

Summary

TCO, ROI and value

The success of any IT provisioning decision is ultimately determined by three key factors, Total Cost of Ownership (TCO); Return on
Investment (ROI); and value.

TCO
The TCO is squashed by virtue that ownership through direct purchase is minimised. The majority of the system is included in the fixed
monthly recurring charge which sits in OPEX.

ROI
Much lower capital requirements enable ROI to be recouped much faster. The monthly payment model means that IT is largely
provisioned from OPEX, simplifying finance and eliminating large-scale depreciation.

Value
The true value of IT is determined by assessing the benefit received against the cost of technology. When considered against benefits
in such areas as financial efficiency, employee productivity and streamlining of technology within the business, then Hosted Desktop
from a secure private cloud offers significantly better value than the on-premise approach to provisioning business technology.

Why is Serviced Cloud a preferred technology

service provider to the service sector?
Serviced Cloud is a specialist provider of cloud technology solutions to the professional services sector. Serviced cloud has the
expertise and experience to help service sector companies and those supplying services to regulated businesses to meet their
regulatory obligations or follow guidelines on the use of technology.

It is our confirmed belief the cloud offers outstanding opportunities for services sector firms to leverage technology so it returns more
value to their businesses. A hosted desktop solution showcases this in a way that is truly compelling.

Serviced Cloud works with in-house compliance experts or external consultants to ensure any solution exceeds interpretation of the
applicable regulatory code(s). Serviced Cloud provides the appropriate level of services required by the majority of SME businesses,
whether governed by a mixture of state legislation and frameworks devised and enforced by regulating authorities or by professional
standards bodies and trade associations.

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About Serviced Cloud
Serviced Cloud is a close knit and highly professional team of technology professionals that are evangelists for cloud solutions. This is
because we believe the benefits are unrivalled by equivalent on-premise approaches to provisioning business technology.

The business benefits of the cloud are regularly highlighted in the press and deliberated in boardrooms. Cloud technology is a topic
about which the vast majority of business leaders are likely to have more than a passing interest.

Based in the heart of London in Canary Wharf, Serviced Cloud was incorporated in 2009 with a clear and simple vision. We are
dedicated to helping business leaders in financial service organisations find the best way of successfully adopting cloud technology in
their businesses.

We offer best of breed Hosted Cloud Services in our ISO27001 London data centres, and help clients to create their own Private Cloud
systems in their own offices or data centres.

Our friendly and professional engineers and consultants have extensive experience, proven track records and can-do attitudes. We
offer independent advice but partner with the leading cloud technology companies to ensure seamless support. We are serviced
focused; our clients satisfaction is paramount.

References and further reading

Back to the future: The advantages of hosted desktop computing for service sector firms
Serviced Cloud
http://www.servicedcloud.com/white-paper/back-to-the-future-the-advantages-of-hosted-desktop-computing-for-service-sector-firms

40 Beaufort Court Canary Wharf London E14 9XL Email: sales@servicedcloud.com Phone: 02070936020 www.servicedcloud.com