Information about Cloud Computing (IaaS) and VMware Technologies

TCO Calculation: Sum of money invested for the entire project Payback Period: Divide the initial investment (cost) by amount of yearly savings Let’s assume, you have initial investment is $3 million and yearly saving is $2 million. $3 million / $ 2 million = 1.5 Now, your payback period is 1.5 years ROI (Return on Investment) Divide the net cost saving per year by project cost. Let’s assume the your project cost was $4 million and yearly saving were $1 million $1 million / $ 4 million = $ 0.25 million Overall Savings: Annual Savings x No. of years = Total Saving $1 million x 5 = $5 Millions Without Initial Investment: (Overall Savings – initial Investment)/initial investment = ROI ($5 million – $2 million)/$2 million = 1.5 OR 150%