Business Case of Casa del Libro

Introduction

Casadellibro is leading online book retail store in Spain since 1995. Owners of the company decided to revamp the product and turn the company around in 2001. They already bought new expensive IT equipment, but before putting it live, economic crisis hit the world reducing revenue prospects. As a result of market turmoil, new Casadellibro management has to decide whether to continue in implementation of already purchased solution and bear higher than appropriate development and maintenance costs than appropriate given current market conditions or purchase cheaper solution based on Microsoft technologies.

Assumptions

• Casadellibro is on line store that operates in the mode 24/7 and any outages would negatively influence customer perception. Hence, the application could be considered being mission critical. Drawing from this fact Casadellibro needs at least two set of servers (application, database, and web server). One set as a main production servers able to maintain high load of daily operations and second set for a fail over in case of both failure and regular maintenance.
• Additionally, all data have to be backed up regularly.

Decision Criteria

As Casadellibro already purchased hardware and software, this already invested amount represents sunk costs, hence should not be considered in the decision.

Decision Criteria

• Purchase cost of new hardware and licenses of Microsoft solution
• For both solutions is necessary to compare
• Implementation costs
• Maintenance costs
• Which SLAs can I agree on with vendors of both hardware and software. How quickly can I receive support in case of failure?
• Scalability in terms of possibility to increase processing power in case of need
• Future functions expandability. Will Microsoft standard solution limit choices of customization?

Recommended Solution

As 2001 is the time of the case, irrespective of the choice I would also consider option of renting the hardware equipment rather than purchasing it. Moreover, the equipment could be placed in the outsourced data center so that Casadellibro would not have to worry about choosing the proper bandwidth as it would be scalable. Also, outsourced data center would provide backup power plan in case of power failures, necessity for mission critical systems which could become very expensive to realize in house.

Hence, my decision would be to deploy cheaper Microsoft solution to the rented HP server, which would be placed in a outsourced data centre. By doing that I would reap benefits having cheap solution now, when the demand and excepted load is lower and later I could scale up the solution taking advantage of falling hardware prices in the future.

What could be done today?

Best option at today's IT market would be to transfer the whole application to the cloud and pay per computing power usage and bandwidth usage. By doing that Casadellibro would not have to worry about customer traffic and load projections as the application would have been completely scalable. Additionally, the cloud computing services provider would be able to assure higher availability of the application at lower costs than Casadellibro's IT department.