Technical Paper. Kronos Cloud Hosting vs. On-Premise Deployment. Cost Analysis Considerations

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1 Technical Paper Kronos Cloud Hosting vs. On-Premise Deployment Cost Analysis Considerations

2 INTRODUCTION Whether you re implementing a Kronos workforce management solution for the first time or upgrading to a newer version of Kronos software, you face an important decision: whether to deploy your application(s) on-premise or in the Kronos Private Cloud. A thorough cost analysis will enable you to more accurately compare the capital expenditures, annual hardware and software maintenance fees, and internal IT labour resources required for an on-premise deployment against the secure, scalable infrastructure, comprehensive IT services, and high system availability guarantee included in the predictable monthly Kronos Cloud Services hosting fees. Especially if your organisation is facing tight budgets, limited IT resources, or shifting corporate priorities, it is worth your while to analyse the costs of an in-house implementation versus a cloud-based deployment. This document outlines the expenses you should factor into your on-premise cost analysis as well as the specific hosting infrastructure components and IT services included in Kronos Cloud Services to help you determine which deployment option will deliver a higher return on investment for your organisation. OPTION 1: ON-PREMISE DEPLOYMENT There are many expenses, including those related to infrastructure, IT services, and labour, that must be taken into consideration when analysing the total costs of deploying your Kronos solution(s) on premise. In addition to the items outlined below, your organisation should factor into your analysis an industry-appropriate annual inflation rate for all IT labour costs and hardware and software agreements associated with the on-premise deployment. Physical Environment Your organisation should factor in annual costs items associated with your data centre infrastructure and operations. These include: Physical building and floor space required Computer room/infrastructure cooling systems Power costs Redundant/backup power costs Water detection systems (if applicable) Insurance costs (for infrastructure, servers, network devices, etc.) Security and access control management for areas housing infrastructure, network, and hardware components An annual inflation rate should be included in your cost calculations to arrive at an accurate estimate of physical environment expenses. Hardware/Servers Your organisation should calculate and include costs for all hardware and related software necessary to run your Kronos solution(s) within your in-house computing environment. It is important to factor in all relevant environments, such as Production, Test, Training, and Disaster Recovery, which will be needed to ensure a smooth, efficient deployment, timely upgrades, and ongoing availability. Key hardware costs to consider include: Physical servers Virtual servers Web/app servers Load balancing hardware and software Disaster Recovery environment servers Annual hardware maintenance agreement costs Operating system and database software licenses and annual maintenance fees Application monitoring software licenses and annual maintenance fees Component replacement costs for periodic hardware refreshes Redundant infrastructure components kept on hand When calculating hardware costs, it is a best practice to factor in replacement of servers in year four or five of the solution lifecycle.

3 IT Infrastructure For a more complete and accurate cost analysis, you should factor into your calculations the annual costs for all infrastructure components, including those needed to help ensure high levels of system security, performance, and availability, used in your Kronos computing environment. These components may include: Networking devices Firewalls Routers VPN devices Citrix components Link controllers Failover devices Intrusion detection/prevention systems (software and annual maintenance fees) Network monitoring software (software and annual maintenance fees) Server monitoring software (software and annual maintenance fees) Anti-virus applications (software and annual maintenance fees) Log monitoring (IT staff cost or vendor OPEX expense) Operating system and network security patching software IIS and FTP components Load balancing devices SSL termination devices An annual inflation rate should be included in your cost calculations for all relevant IT infrastructure components. Backup Services Because regularly scheduled backups are needed to ensure that your Kronos application(s) and data can be restored in the event of a server failure, power outage, or other incident that results in system downtime, it is critical to factor expenses associated with your backup and recovery processes. These may include costs related to: Automatic execution of nightly backups (including software platform purchase) Local backup storage (disk backup stored in the production data centre before being rotated off site) Off site storage and retention of backups IT Labour Costs When performing your analysis, your organisation should take into consideration all IT labour costs (resources and hours) required to adequately support and maintain each of your Kronos environments, including Production, Test, Training, and Disaster Recovery, throughout the solution lifecycle. Database Management System (DBMS) and operating system (O/S) environment configuration, monitoring, and management performed by your database analysts (DBA) and IT staff for: o Routine management of the database environment o On-demand assistance, incident analysis, and resolution o Execution of maintenance scripts for updating statistics, ensuring adequate free space, maintaining indexes, performing database integrity checks, and more o Application of all O/S and DBMS patches, service packs, and hot fixes o Database restores/refreshes

4 o Response to alerts o Day-to-day environment management o On-demand support of end-users o On-demand labour related to managing disruptive events o Hardware and/or network components refreshes (when needed) o DBA and IT staff training and certifications/recerts Network maintenance tasks performed by your IT staff, including: o Maintenance of all servers o Repair and replacement of defective or failed hardware and/or hardware refreshes o Installation and configuration of hardware upgrades o Management and support of all network components, including firewalls, VPNs, IPSEC tunnels, FTP and IIS components, SSL termination devices, load balancers, and traffic controllers o Application of updates to network and monitoring software, such as anti-virus and intrusion detection/prevention software o Management and support of all circuits (T1, MPLSs, etc.) o On-demand support of end-users o IT staff training and certifications/recerts Kronos application upgrades/updates performed by your DBAs or IT staff, such as: o Application of Kronos version upgrades o Application of Kronos service packs, patches, and quarterly legislative updates o Database restores o Managing on-demand Kronos system issues and/or researching and managing disruptive events that affect Kronos solutions o On-demand support of end-users o Miscellaneous care and support of Kronos solutions o IT, network engineer, and DBA staff training and certifications/recerts When calculating labour costs related to an on-premise Kronos deployment, you should include costs for any planned IT staff salary or headcount increases. Disaster Recovery If your organisation wishes to have a secondary environment ready and available for Disaster Recovery (DR) purposes, you will need to establish and maintain a redundant network and server environment/infrastructure. You will need to install all necessary Kronos applications and other applicable software in the secondary environment and set up secure, automated daily replications from your Production environment to the DR environment. As part of your cost analysis, you should track expenses for all the components and activities necessary to ensure that your DR environment is kept up to date and can support your Kronos solution(s) in the event that a disaster and/or outage renders your Production environment(s) unusable. When totaling your annual DR costs you should include: Server costs Network and infrastructure costs VPN/other connectivity to your DR site Software (anti-virus, monitoring, etc.) and associated annual maintenance fees

5 Labour costs related to care/updating of DR servers Costs for developing and maintaining your DR plan Execution of annual DR testing When calculating Disaster Recovery costs, it is a best practice to factor in replacement of servers in year four or five of the solution lifecycle. OPTION 2: HOSTING IN THE KRONOS PRIVATE CLOUD Kronos Cloud Hosting provides a comprehensive turnkey solution for delivering Kronos applications via the Cloud. With this deployment option, Kronos hosts your workforce management solutions in the Kronos Private Cloud, where users can access them easily and securely over the web at any time, from anywhere using their mobile devices, tablets, laptops, and desktops. With the Kronos Cloud Hosting service, dedicated Kronos employees will handle all IT tasks and issues related to managing, updating, and maintaining your Kronos applications and associated computing infrastructure all for a predictable monthly fee. While experienced Kronos technical consultants are keeping your Kronos applications and infrastructure up to date and running smoothly, your IT team is free to focus on core business initiatives and strategic, revenue-generating activities. What s more, a Service Level Agreement (SLA) with guaranteed 99.5 percent availability helps to ensure that your Kronos solutions will always be up and running when you need them. When analysing the costs of an on-premise versus a cloud deployment, it is important to understand the scope of infrastructure components, IT services, and expertise that are included in the standard monthly Kronos Cloud Hosting service fees. Physical Environment The Kronos Private Cloud infrastructure enables us to deliver application hosting services in a secure environment that has achieved SSAE 16 SOC 1 and AT101 SOC 2 audit compliance. Kronos Cloud Services partner data centres offer world-class facilities for Power Management, Heating/Ventilation/Air Conditioning (HVAC), Fire Detection and Suppression, Seismic Engineering, Physical Security, Tier 1 Internet Connectivity, and access to an Intelligent IP and IP MPLS Network. Design elements of the Kronos environment within the partner data centre have been engineered to ensure that all Kronos systems reside in a physically and logically secure space. The facility is staffed 24x7 by on-site personnel, and environmental conditions are closely monitored and controlled. Key features of the Kronos Cloud Hosting partner data centres include: Physical Site Owned and managed by Kronos employees, the Kronos Private Cloud infrastructure resides in a physically and logically secure space designed to withstand extreme weather events and prevent unauthorised access. Structural and design features of the physical facility include: Seismic engineering, including racks that are anchored to the concrete slab below the site s raised floor Unmarked building with false entrances Bulletproof walls and glass throughout the facility Vehicle blockades at entrances Customised parking lot designs located at a distance from clients infrastructure Security cameras with digital recorders located throughout the facility and grounds On-premise security guards Facility Monitoring Advanced monitoring tools and systems proactively monitor the data centre facility and its critical infrastructure: Security: The data centre is monitored by on-premise security guards, security systems on the building exterior, and numerous security cameras with digital recorders located throughout the property. Biometric systems, including palm scanners, provide strict access control and protect against unauthorised entry.

6 Power Power: Multiple uninterruptible power source (UPS) systems are installed in the data centre to eliminate fluctuations and to provide clean, continuous power to your workforce management systems. All power systems are configured to be N+1 redundant to help ensure that you receive high application availability, security, and performance. Fire Protection: The latest fire suppression methods, including systems that detect smoke from the earliest stage of combustion, deliver the highest levels of protection and minimise the risk of fire damage. These systems utilise state-ofthe-art sniffer systems augmented by heat detection and dry-pipe sprinkler systems. HVAC: The entire HVAC system is controlled by an automated building management system (BMS), which monitors the HVAC system and provides alarm notification to the data centre facilities team in the event that potential problems are identified. Power is sourced by redundant utility power feeds and backed by on-site diesel generators. The design features isolated paths from two fully independent uninterruptible power source (UPS) systems, each of which can carry the entire load of the part of the data centre that it serves. In the unlikely event that a UPS or any of its downstream devices fails, the other UPS will safely assume the entire load without any switching or load transfer. The data centre s fuel system has been designed to provide continuous run time under full load, with adequate fuel stored on site to provide 23 hours of power at full load in the event of a power failure before refeuelling is required. Access Control State-of-the-art multilevel physical security features are built into Kronos Cloud Services partner data centres to ensure that your applications and data are never compromised. Data centre physical security measures include: On-premise security guards Security systems on the building exterior: cameras, false entrances, vehicle blockades, customised parking lot designs, bulletproof glass/walls, and unmarked buildings Biometric systems, including palm scanners Numerous security cameras with digital recorders Portals and person-traps that authenticate only one person at a time IT Infrastructure Kronos Cloud Services provides comprehensive hosting, management, and maintenance of your workforce management solutions, including complete support of the associated IT infrastructure. These services include the procurement, provisioning, configuration, maintenance, and management of all computer hardware, operating systems, and database systems required to run your Kronos application(s), including the repair and replacement of defective or failed hardware/devices and the installation of any applicable updates. Kronos assumes responsibility for 24x7 proactive management of data centre infrastructure and associated applications, including but not limited to: Servers Firewalls Routers Switches IIS SFTP Intrusion detection/prevention systems Anti-virus software Infrastructure and security monitoring tools and applications LDAP infrastructure Citrix components Load balancing File transfers Response to alerts

7 All hosted customers are provided with one (1) Production and one (1) Non-Production Kronos application environment. Any additional environments, such as Development, Training, or Disaster Recovery, that your organisation may require are available for an additional fee. Backup Services Backup services are included in the monthly Kronos Cloud Services hosting fees. Customer data is backed up daily (incremental), with a full backup (includes all history and configurations) performed every seven days. Database backups are then replicated via encrypted SSL sessions to an off-site Kronos managed/hosted environment for storage. Backups are retained for 28 days. Change Control Kronos Cloud Services has a formal process, backed by automated tools and systems, in place to help ensure that change planning, execution, and follow-through are executed in a controlled and coordinated manner that minimises disruption to cloud hosting services and ensures timely change management for customers. These established change control policies, a requirement for achieving SOC certifications, are implemented in the Kronos Private Cloud and are designed to reduce unplanned downtime and support higher availability and performance of your Kronos solutions. Vulnerability Testing The Kronos Cloud Services team performs ongoing vulnerability testing, a best practice that is not always employed in on-premise deployments, to significantly reduce the risk of hacking and other security threats. Proactively Planned and Applied Service Packs The Kronos Cloud Services team will apply all database and operating system level service packs, thereby freeing your internal IT staff from tracking their availability and scheduling their application. In addition, your assigned Kronos Cloud customer manager (CCM) will review any available Kronos service packs and make recommendations as to which would add value to your specific Kronos solution a task that is often neglected by in-house IT staff due to competing internal priorities. The CCM will also work with your organisation to schedule the installation of service packs to your non-production and Production environments, making sure that your hosted solutions are always up to date. IT Labour Costs Skilled Kronos employees will manage and maintain your Kronos applications and hosted infrastructure and perform other IT-related functions related to your Kronos workforce management solutions. The Kronos Cloud Services team has the breadth and depth of IT experience, technical skills, and Kronos application expertise required to manage, support, and maintain your cloud-hosted Kronos solutions and back them up with our 99.5 percent uptime guarantee. As part of your monthly hosting fees, the Kronos Cloud Services team will implement, monitor, and manage the configuration and performance of your hosted Kronos solutions, including the underlying operating systems and database environment. Our staff will apply all Kronos application upgrades and updates, as well as any application service packs and legislative updates. They will also update all hosted servers with critical operating system and database security patches, service packs, and hot fixes necessary to maintain high uptime and performance levels throughout the life of the hosted solution. The Kronos Cloud Services team will perform database configuration and routine database management, including tuning, capacity planning, and monitoring. On an ongoing basis, our staff will execute and review routine maintenance scripts to update statistics, ensure adequate free space, maintain indexes, and perform database integrity checks. Re-indexing is performed as needed. The Cloud Services team will also perform regular reviews of database health check output, database reconcilliation reports, SQL Server logs, server performance logs, and Windows Event Viewer items, as well as memory and CPU utilisation. In addition, the Kronos Cloud Services team will manage and support all network components, such as firewalls, VPNs, IPSEC tunnels, SFTP and IIS components, SSL termination devices, load balancers, and traffic controllers. Kronos Private Cloud architects and technical staff have earned a wide range of technical and security certifications that prove they have amassed the experience and mastered the skills needed to deliver reliable, high-performance cloud hosting services. These certifications include: Microsoft Certified Professional Microsoft Certified Technology Specialist (MCTS)

8 Oracle 9ias: Oracle 9i Application Server Certified Associate (1Z0-301) Microsoft Certified Solution Developer (MCSD) PMI s Project Management Professional (PMP) ITIL v3 (Foundation) CompTIA A+ (2008), Computer-Communications Systems Supervisor 7 level (military) Oracle Certified Associate (SQL & PL/SQL) Microsoft Certified Professional (MCP Server 2003) Microsoft Certified System Administrator (MCSA Server 2003) Microsoft Certified Technology Specialist (MCTS SQL 2005) Juniper Certified JNCIA-EX (Associate, Enterprise Switching) Juniper Certified JNCIS-ER (Specialist, Enterprise Routing) Microsoft Certified DBA (MCDBA) Citrix Certified Administrator (CCA) Oracle Certified Professional (OCP) VMware Certification HP 3Par Storage Certification HP Data Protector Certification Certified Information Systems Security Professional (CISSP) Certified Information Systems Auditor (CISA) Certified Information Security Manager (CISM) Certified in the Governance of Enterprise IT (CGEIT) Certified in Risk and Information Systems Control (CRISC) Expedited Incident Resolution In the unlikely event that an incident should occur, the Kronos Cloud Support, Global Support, and Engineering teams can access your cloud-based solution and bring to bear all resources needed to resolve the issue with optimal speed and efficiency. The Kronos employees who support our cloud-based customers have in-depth training in and knowledge of all the technologies servers, operating systems, databases, and applications required to host and manage Kronos solutions in our private cloud. In-house IT resources may be unable to support on-premise Kronos solutions with equal expediency due to competing priorities and/or limited knowledge of Kronos applications or specific aspects of the underlying technology platform(s). SSAE SOC1 and AT101 SOC2 Design Many organisations design their IT solutions on premise to support multiple applications that require different platforms and processes, which translates to greater complexity and increased costs over time. In its entirety, the SOC1 and SOC2 compliant Kronos Private Cloud solution is designed to optimise the workforce management platform, thereby helping to ensure the best possible configuration and deployment of your Kronos applications. The rigorous SOC1 and SOC2 compliance programs require that standard processes and tools are in place for security and confidentiality. Data Assurance/Disaster Recovery As a base level of data assurance against a disaster, Kronos performs incremental backups daily and a full backup (includes all history and configurations) every seven days to a secondary data centre. Many customers, however, require a fully documented and regularly tested Disaster Recovery (DR) plan for their enterprise applications. For a nominal additional fee, Kronos can also offer enhanced DR services with a guaranteed Recovery Time Objective (RTO) of 72 hours. Kronos provides an annual test of its DR processes for customers, as this is typically a requirement from audit.

9 IS IT TIME TO CONSIDER KRONOS CLOUD SERVICES? Your choice of deployment model is based on many factors, including your existing computing infrastructure, your capital and operating budgets, and the availability and expertise of your in-house IT resources. By comparing the costs of implementing your Kronos solution on premise versus using Kronos Cloud Services for a predictable monthly fee, your organisation will be able to make an informed decision that best suits your budget, resources, and corporate priorities. Upon careful analysis, many organisations find that Kronos Cloud Services can help accelerate their return on investment by: Helping avoid capital expenditures Enhancing system availability and reliability Improving data backup and protection Reducing IT support staff costs Enabling reallocation of IT support staff to focus on strategic corporate initiatives To learn what Kronos Cloud Services can do for your organisation, please contact your Kronos representative or call We ll work with you to determine whether using Kronos Cloud Services to host and manage your Kronos workforce management solution will help your organisation reduce costs and increase productivity for bottom-line value. Kronos Systems India Private Ltd. Tridib Level 2, Unit 1 Bagmane Tech Park C V Raman Nagar Bangalore , Kronos Incorporated. Kronos and the Kronos logo are registered trademarks and Workforce Innovation That Works is a trademark of Kronos Incorporated or a related company. All other product and company names are used for identification purposes only and may be the trademarks of their respective owners. All specifications are subject to change. All rights reserved. SV0129-INv1