This is the Cost Model for LEGETO.COM, our proyect for the Stanford´s Technology Entrepreneurship Class

1. LEGETO.COM
Cost model

2. Local hosting provider Vs Cloud
computing cost
• We compare two models for the computing
needs of LEGETO.COM: Local hosting and
Cloud computing
• We divided the exercice in two:
– Costs for Years 1 and 2
– Costs for Years 3, 4 and 5
• After the exercice, cloud computing costs is a
better alternative for us

3. Years 1 and 2 with local hosting
Productive Environment in local hosting (Global Crossing, Telmex, IBM or others)
Physical Servers
Item Quantity Unit Cost Total Cost/month Total Cost/Year
Memory: 12GB / Processor: 1 Proc (2 core) / HDD: 145GB 2 USD$ 910 USD$ 1,820 USD$ 21,840
Memory: 20GB / Processor: 2 Proc (2 core) / HDD: 750GB 0 USD$ 915 USD$ 0 USD$ 0
Memory: 20GB / Processor: 2 Proc (4 core) / HDD: 300GB 0 USD$ 959 USD$ 0 USD$ 0
Memory: 10GB / Processor: 1 Proc (2 core) / HDD: 600GB 0 USD$ 915 USD$ 0 USD$ 0
Backup
Item Quantity Unit Cost Total Cost/Month Total Cost/Year
Backup process 4 USD$ 70 USD$ 280 USD$ 3,360
Administration
Item Quantity Unit Cost Total Cost/Month Total Cost/Year
Data Base Administration 0 USD$ 30 USD$ 0 USD$ 0
Storing
Item Quantity Unit Cost Total Cost/Month Total Cost/Year
SAN 450 GB 0 USD$ 800 USD$ 0 USD$ 0
Communications
Item Quantity Unit Cost Total Cost/Month Total Cost/Year
Internet 256 Kbps (Por GB/Mes - En escalas de 50Gb) 0 USD$ 75 USD$ 0 USD$ 0
Internet 1 Mbps (Por GB/Mes - En escalas de 160Gb) 1 USD$ 275 USD$ 275 USD$ 3,300
Internet 2 Mbps (Por GB/Mes - En escalas de 320Gb) 0 USD$ 400 USD$ 0 USD$ 0
Lan to Lan 2 Mbps USD$ 428 USD$ 0 USD$ 0
Lan to Lan 6 Mbps USD$ 610 USD$ 0 USD$ 0
Lan to Lan 10 Mbps USD$ 1,150 USD$ 0 USD$ 0
Firewall 1 USD$ 315 USD$ 315 USD$ 3,780
First Time Installation
Item Quantity Unit Cost Total Cost/Month Total Cost/Year
Installation USD$ 1,500 USD$ 0 USD$ 0
Others
Item Quantity Unit Cost Total Cost/Month Total Cost/Year
Information transfer ( GB/Month) USD$ 3 USD$ 0 USD$ 0
Aditional Storing (GB/Month) USD$ 3 USD$ 0 USD$ 0

4. Years 3, 4 and 5 with local hosting
Productive Environment in local hosting (Global Crossing, Telmex, IBM and others)
Physical Servers
Item Quantity Unit Cost Total Cost/month Total Cost/Year
Memory: 12GB / Processor: 1 Proc (2 core) / HDD: 145GB 1 USD$ 910 USD$ 910 USD$ 10,920
Memory: 20GB / Processor: 2 Proc (2 core) / HDD: 750GB 1 USD$ 915 USD$ 915 USD$ 10,980
Memory: 20GB / Processor: 2 Proc (4 core) / HDD: 300GB 1 USD$ 959 USD$ 959 USD$ 11,508
Memory: 10GB / Processor: 1 Proc (2 core) / HDD: 600GB 1 USD$ 915 USD$ 915 USD$ 10,980
Backup
Item Quantity Unit Cost Total Cost/Month Total Cost/Year
Backup process 4 USD$ 70 USD$ 280 USD$ 3,360
Administration
Item Quantity Unit Cost Total Cost/Month Total Cost/Year
Data Base Administration 0 USD$ 30 USD$ 0 USD$ 0
Storing
Item Quantity Unit Cost Total Cost/Month Total Cost/Year
SAN 450 GB 0 USD$ 800 USD$ 0 USD$ 0
Communications
Item Quantity Unit Cost Total Cost/Month Total Cost/Year
Internet 256 Kbps (Por GB/Mes - En escalas de 50Gb) USD$ 75 USD$ 0 USD$ 0
Internet 1 Mbps (Por GB/Mes - En escalas de 160Gb) USD$ 275 USD$ 0 USD$ 0
Internet 2 Mbps (Por GB/Mes - En escalas de 320Gb) 1 USD$ 400 USD$ 400 USD$ 4,800
Lan to Lan 2 Mbps USD$ 428 USD$ 0 USD$ 0
Lan to Lan 6 Mbps USD$ 610 USD$ 0 USD$ 0
Lan to Lan 10 Mbps USD$ 1,150 USD$ 0 USD$ 0
Firewall 1 USD$ 315 USD$ 315 USD$ 3,780
First Time Installation
Item Quantity Unit Cost Total Cost/Month Total Cost/Year
Installation USD$ 1,500 USD$ 0 USD$ 0
Others
Item Quantity Unit Cost Total Cost/Month Total Cost/Year
Information transfer ( GB/Month) USD$ 3 USD$ 0 USD$ 0
Aditional Storing (GB/Month) USD$ 3 USD$ 0 USD$ 0

5. Years 1 and 2 with Amazon EC2
Productive Environment using Amazon EC2 Cloud Computing
Amazon EC2
Item Quantity Hours Unit Cost (hour) Total cost/day
Standard On-Demand Instances
Small (Default) 2 24 USD$ 0.085 USD$ 4.08
Large 0 24 USD$ 0.340 USD$ 0.00
High-Memory On-Demand Instances
Extra Large 0 24 USD$ 0.500 USD$ 0.00
Extra Large (turned off) 0 24 USD$ 0.500 USD$ 0.00
Amazon Data Transfer
Item Quantity Unit Cost Total cost/month Total cost/year
Data Transfer In ( GB/Month) 50 USD$ 0.100 USD$ 5 USD$ 60
Data Transfer Out ( GB/Month) 50 USD$ 0.150 USD$ 8 USD$ 90
Amazon Elastic Block Storage (EBS)
Item Quantity Unit Cost Total cost/month Total cost/year
Amazon EBS Volumes
Storage (GB/Month) 100 USD$ 0.100 USD$ 10 USD$ 120
Requests ( 1 million I/O) 20 USD$ 0.100 USD$ 2 USD$ 24
Amazon EBS Snapshots to Amazon S3
Storage (GB/Month) 100 USD$ 0.150 USD$ 15 USD$ 180
PUT Request (1000 Puts) 1 USD$ 0.010 USD$ 0 USD$ 0
GET Request ( 10000 Gets) 1 USD$ 0.010 USD$ 0 USD$ 0
Amazon Elastic IP Address
Item Quantity Unit Cost Total cost/month Total cost/year
Elastic IP (hour) 5 USD$ 0.000 USD$ 0 USD$ 0
Elastic IP with no use (por hora) 5 USD$ 0.010 USD$ 36 USD$ 438
Elastic IP Mapping (mapping/month) 10 USD$ 0.000 USD$ 0 USD$ 0
Amazon Cloud Watch
Item Quantity Unit Cost Total cost/month Total cost/year
Elastic CloudWatch (instance/hour) 2 USD$ 0.015 USD$ 22 USD$ 263
Amazon Virtual Private Cloud
Item Quantity Unit Cost Total cost/month Total cost/year
VPN (hour) 0 USD$ 0.050 USD$ 0 USD$ 0
Data Transfer In (Por GB/mes) 0 USD$ 0.100 USD$ 0 USD$ 0
Data Transfer Out (Por GB/mes) 0 USD$ 0.150 USD$ 0 USD$ 0

6. Years 3,4 and 5 with Amazon EC2
Productive Environment using Amazon EC2 Cloud Computing
Amazon EC2
Item Quantity Total hours/day Unit Cost (hour) Total cost/day
Standard On-Demand Instances
Small (Default) 3 24 USD$ 0.085 USD$ 6.12
Large 1 24 USD$ 0.340 USD$ 8.16
High-Memory On-Demand Instances
Extra Large 0 24 USD$ 0.500 USD$ 0.00
Extra Large (turned off) 0 24 USD$ 0.500 USD$ 0.00
Amazon Data Transfer
Item Quantity Unit Cost Total cost/month Total cost/year
Data Transfer In ( GB/Month) 200 USD$ 0.100 USD$ 20 USD$ 240
Data Transfer Out ( GB/Month) 200 USD$ 0.150 USD$ 30 USD$ 360
Amazon Elastic Block Storage (EBS)
Item Quantity Unit Cost Total cost/month Total cost/year
Amazon EBS Volumes
Storage (GB/Month) 500 USD$ 0.100 USD$ 50 USD$ 600
Requests ( 1 million I/O) 20 USD$ 0.100 USD$ 2 USD$ 24
Amazon EBS Snapshots to Amazon S3
Storage (GB/Month) 500 USD$ 0.150 USD$ 75 USD$ 900
PUT Request (1000 Puts) 1 USD$ 0.010 USD$ 0 USD$ 0
GET Request ( 10000 Gets) 1 USD$ 0.010 USD$ 0 USD$ 0
Amazon Elastic IP Address
Item Quantity Unit Cost Total cost/month Total cost/year
Elastic IP (hour) 5 USD$ 0.000 USD$ 0 USD$ 0
Elastic IP with no use (por hora) 5 USD$ 0.010 USD$ 36 USD$ 438
Elastic IP Mapping (mapping/month) 10 USD$ 0.000 USD$ 0 USD$ 0
Amazon Cloud Watch
Item Quantity Unit Cost Total cost/month Total cost/year
Elastic CloudWatch (instance/hour) 4 USD$ 0.015 USD$ 43 USD$ 526
Amazon Virtual Private Cloud
Item Quantity Unit Cost Total cost/month Total cost/year
VPN (hour) 0 USD$ 0.050 USD$ 0 USD$ 0
Data Transfer In (Por GB/mes) 0 USD$ 0.100 USD$ 0 USD$ 0
Data Transfer Out (Por GB/mes) 0 USD$ 0.150 USD$ 0 USD$ 0

7. Summary for local hosting for years 1
and 2
Summary Total Cost/Month Total Cost/Year
Servers USD$ 1,820 USD$ 21,840
Backup USD$ 280 USD$ 3,360
Administration USD$ 0 USD$ 0
Storing USD$ 0 USD$ 0
Communications USD$ 590 USD$ 7,080
Installation USD$ 0 USD$ 0
Others USD$ 0 USD$ 0
Total Cost USD$ 2,690 USD$ 32,280

8. Summary for local hosting for years 3,
4 and 5
Summary Total Cost/Month Total Cost/Year
Servers USD$ 3,699 USD$ 44,388
Backup USD$ 280 USD$ 3,360
Administration USD$ 0 USD$ 0
Storing USD$ 0 USD$ 0
Communications USD$ 715 USD$ 8,580
Installation USD$ 0 USD$ 0
Others USD$ 0 USD$ 0
Total Cost USD$ 4,694 USD$ 56,328

9. Summary for Amazon EC2 in Years 1
and 2
Summary Total cost/month Total cost/year
Amazon EC2 USD$ 122 USD$ 1,469
Amazon Data Transfer USD$ 13 USD$ 150
Amazon Elastic Block Storage (EBS) USD$ 27 USD$ 324
Amazon Elastic IP Address USD$ 36 USD$ 438
Amazon Cloud Watch USD$ 22 USD$ 263
Amazon Elastic Load Balancing USD$ 0 USD$ 0
Amazon Virtual Private Cloud USD$ 0 USD$ 0
Amazon Import/Export USD$ 0 USD$ 0
Total Cost USD$ 220 USD$ 2,644

10. Summary for Amazon EC2 in years 3, 4
and 5
Summary Total cost/month Total cost/year
Amazon EC2 USD$ 428 USD$ 5,141
Amazon Data Transfer USD$ 50 USD$ 600
Amazon Elastic Block Storage (EBS) USD$ 127 USD$ 1,524
Amazon Elastic IP Address USD$ 36 USD$ 438
Amazon Cloud Watch USD$ 43 USD$ 526
Amazon Elastic Load Balancing USD$ 0 USD$ 0
Amazon Virtual Private Cloud USD$ 0 USD$ 0
Amazon Import/Export USD$ 0 USD$ 0
Total Cost USD$ 685 USD$ 8,229

11. People costs
• Our company will be originally formed by 5
people
– 2 Developers: 1 front end, 1 Backend
– 3 Management Roles: CEO, Sales & Marketing,
Operations & Technology
– 1 Product Manager
People and Roles
Item Quantity Unit Cost (hour) Total cost/month Total cost/year
Developers 2 USD$ 20.000 USD$ 6,400 USD$ 76,800
Management (CEO, Marketing, Sales, Technology) 3 USD$ 25.000 USD$ 12,000 USD$ 144,000
Product Manager 1 USD$ 25.000 USD$ 4,000 USD$ 48,000
Total: USD$ 22,400 USD$ 268,800

12. Total Costs
Item 2012 2013 2015 2015 2016
Hosting $1,097.60 $2,634.24 $8,215.44 $8,215.44 $8,215.44
People $112,000.00 $268,800.00 $268,800.00 $268,800.00 $268,800.00
Total: $113,097.60 $271,434.24 $277,015.44 $277,015.44 $277,015.44