Costberg – Are you intrigued? I once was!
A couple of years ago whilst networking at a conference I started chatting to someone about the difference between cost, price and value and first heard the word “costberg”. It intrigued me and it’s actually a very simple approach.
As much as 90% of an iceberg is below the surface of the water and it is this principal that was being applied when talking about a costberg. Whilst we often quote for fully hosted or a hybrid infrastructure, the client may perceive the ‘on premise solution’ as more cost effective, however quite often they forget about the hidden costs.
With an ‘on premise system’ the perception is often that there is a high initial outlay on hardware and licensing but then very minimal cost for the lifetime of that system which is seen as your electricity and your network connection. Ok, some people will also think of the support costs for that system or software maintenance agreements and so on. But what if you really start to peel back the deeper costs? Perhaps the thermal output of the infrastructure and how that will affect heating/cooling requirements and costs? Maybe price of the square foot where the server is sitting in the office?
You could say that I’m being picky and going to extremes but realistically they are all costs of running that ‘on premises solution’.
At VooServers we prefer to concentrate on value, so yes, once you factor in the underlying costs, we can give you a very competitive price to your ‘on premise solution’ but if you take into account the 24×7 support/monitoring, routine audits, on-going maintenance, 1 hour hardware replacement SLA’s, multi-site failover and so on, the value far outweighs the cost.