Total Cost of Ownership Framework to Estimate the Cost of Cloud Computing Services: A Case Study Research

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Examensarbete för masterexamen
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2021
Författare
Bäcknäs, Erik
Börjesson, Eric
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Cloud computing services add different layers of abstraction and therefore suits different application needs. This creates a desire to choose the cloud service that suits the application’s requirements best while minimizing the cost. Current research on selection techniques focused on cost, indicate that particular cost types and factors are frequently underestimated by practitioners. In this study, the purpose is to identify both explicit and hidden costs over the lifetime of applications using cloud services. To address this, a Total Cost of Ownership (TCO) framework has been developed. Furthermore, practical guidelines of how to apply the framework have been derived and aim to assist practitioners in the selection process of cloud computing services. The method applied was a spiral process model consisting of four case cycles. The first two cycles were of exploratory nature where a literature review, interviews with practitioners and application analysis were conducted to explore relevant cost metrics to include in the TCO framework. In the third cycle, which was of confirmatory nature, the TCO framework was applied to a selection process of cloud computing service to use for an application at the collaborating company. Finally, the last case cycle was of explanatory nature and practical guidelines were derived from the findings of the previous case cycles. The result presents a TCO framework consisting of nine cost metrics, five connected to capital expenditures and four related to operational expenditures. Further, the TCO framework was confirmed to be useful after validation with practitioners at the collaborating company. Lastly, a number of practical guidelines were obtained which can be useful in the selection process of cloud computing services to use for an application.
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TCO, Total Cost of Ownership, Cost estimation, Cloud Computing Services, AWS
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