Cloud Vs On-Premise Email Archive Setup: A Step-by-Step Cost Benefit Analysis

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This document highlights the TCO for a customer having 3000 mailboxes deployed on an on premise Primary mail platform (as a sample) and who is making a choice between an on premise archival system and a cloud archival system.

Cloud setups by their very nature follow the Opex model of costing. On premise setups are typically a combination of Capex and Opex costs. For inhouse setups, there is a fixed upfront cost to purchase equipment, servers, storage etc and then an ongoing Opex cost to maintain and run this setup.

For the purpose of making an apple to apple comparison between a Capex intensive on premise setup and an Opex based cloud setup, we have assumed a lifetime for all capex purchased and converted these expenses into annual opex costs.

Also for the sake of building this document, we have assumed an in-premise archival solution with average costing and have compared it with Mithi’s Vaultastic cloud archival service.

If a similar exercise is done for any other product and service, the results would be quite similar. While the content may vary, the context is the same.

We would need to start by defining the ideal architecture for an on premise setup, so that we can arrive at its annual bill of material.


On premise Email Solution Architecture

It also demonstrates the various teams required to maintain and monitor the setup.
Thus to make this setup possible we will need the following components:


Component Annual cost* (INR) Description
Infrastructure Elements and Costs
Two Archival servers in a cluster (fail over) 3,33,334 This annual cost assumes that one  server has a 3 year life (warranty) and is purchased for an upfront cost of INR 500,000
SAS Storage
(live store)
7,28,000 Need 65TB of live store, which costs 11200 per TB a year. SAS storage is purchased for an upfront cost of 33600 per TB and has a lifetime of 3 years.
Backup Tape system 3,00,000 Considering a reliable system with multiple tapes to cover 8 years, purchased at an upfront cost 900,000 and has a life of 3 years
Data center costs (for all equipment) 2,00,000 Co-location and network charges
Automated monitoring via a SaaS tool 15,000 Using SaaS monitoring tools
Services Costs
Day shift administrator 6 people (3 shifts over 24/7) 18,00,000 Assumes a cost of 25000 including salary and overheads
NOC operator 3 people (3 shifts over 24/7) 9,00,000 Assumes a cost of 25000 including salary and overheads
Software Costs
Archival software subscription 15,00,000 Assuming a per user per year subscription of 450 of whatever solution you choose. This will need to be changed to the appropriate value of the chosen application.
TOTAL Annual cost (in Rs) (A) 57,76,334
Effective cost per user per year =(A)/3000 1925

Note: This setup does not consider a DR site or redundancies to achieve extreme high availability as is promised by cloud setups.

Vaultastic setup and cost for 3000 users

For a SaaS service, you don’t have to provision any infrastructure. Simply sign up, provision users and consume the services.

The following are the components of a cloud infrastructure for an email archiving setup. There are only 2 components to be considered by the customer, viz. The bandwidth and the internal IT team to front end the queries by the end user.

Component Annual cost* (INR) Description
Infrastructure Elements and Costs
Bandwidth consumption 1,00,000 This covers the Internet bandwidth consumption for archiving mail from the on premise setup to Vaultastic. This is approximately 5 mbps across all devices and locations with average assumptions of consumption patterns (peak hours etc)
Services Costs
Day shift administrator 6 people (3 shifts over 24/7) 18,00,000 Assumes a cost of 25000 including salary and overheads. These are internal helpdesk staff who support the 3000 users by taking back to back help from the OEM.
SaaS Costs
Vaultastic subscription 25,50,000 Assuming a per user per year subscription of 850 for the TRACER subscription, which offers unlimited storage and 7 year retention of email.
TOTAL Annual cost (B) 44,50,000
Effective cost per user per year =(B)/3000 1483

The comparison

The table below summarizes the above mentioned numbers and demonstrates that the cloud setup is more cost effective than an inhouse setup and offers tremendous benefits in terms of reliability, security and ease of scale, which cannot be easily quantified (problems in these areas lead to frequent downtimes, data loss and dips in performance, which impact productivity)


On Premise Setup
(Based on Bare metal and the chosen archival application)
Cloud Setup
(Based on Vaultastic TRACER Subscription)
Infrastructure Costs (Annual – INR) 15,76,334 1,00,00
Services Cost (Annual – INR) 27,00,000 18,00,000
Software/Subscription Cost (Annual – INR) 15,00,000 25,50,000
Total Cost (Annual – INR 57,76,334 44,50,000
Effective per user per year cost (Annual – INR) 1925 1483
Model Provision server and storage infrastructure on premise (bare metal or virtualized), deploy the Archiving software on this infrastructure, configure for high availability and security Subscribe, Configure and Consume the services
Infrastructure Setup a server and storage in your data center, and install the chosen archival software on it. The server capacity and storage capacity will depend on number of users and the retention period. The users will access this over the LAN/WAN. No infrastructure required at your end except an Internet connection to allow transport of mail from the Primary mail servers to the Archival service on the cloud.
  • Captive private deployment with full control
  • Can use existing components for compute and storage (if available)
  • Opex model, pay as you go, no Capex required
  • No maintenance and monitoring of infrastructure
  • Guaranteed performance and durability of data
  • Unlimited storage, with automatic hands free growth on demand.
  • Solution and platform designed for high security
  • Setup needs to be designed for reliability, security and high availability.
  • Re-architecting required for growing storage demands.
  • Re-architecting required for new security threats
  • Plan Upgrades and updates of the software to handle new solution demands
  • Internal Teams to maintain and monitor the setup 24/7 and deliver on SLA
  • Capex to purchase and AMCs to maintain the infrastructure.
  • Setup needs a backup solution in place for disaster recovery.
Archiving and access to the Archival application on the cloud can put pressure on the Internet bandwidth


It is observed that the TCO of a cloud setup is lower or almost at par with the TCO of an on premise setup and offers immense other benefits, which are difficult to quantify in terms of scalability, performance, ease, convenience, and security.
This means that besides the other benefits, the mathematics behind a cloud setup is also in favour of moving your workload up into the cloud.
(*) The rates are got from reliable sources on the Internet. Even though they are subject to change or may vary, they give a good indication of the cost and allow building out a comparison.

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